F5PM Revision Question Bank - Sample - D14 J15 PDF

PL
December 2014June 2015 Edition
REVISION QUESTION BANK
SA
M
ACCA
Paper F5 | PERFORMANCE MANAGEMENT
ATC International became a part of Becker

Professional Education in 2011. ATC International
has 20 years of experience providing lectures
and learning tools for ACCA Professional
Qualications. Together, Becker Professional
Education and ATC International offer ACCA
candidates high quality study materials to maximize
their chances of success.
In 2011 Becker Professional Education, a global leader in professional education, acquired ATC International.
ATC International has been developing study materials for ACCA for 20 years, and thousands of candidates
studying for the ACCA Qualification have succeeded in their professional examinations through its Platinum and
Gold ALP training centers in Central and Eastern Europe and Central Asia.*
Becker Professional Education has also been awarded ACCA Approved Content Provider Status for materials
for the Diploma in International Financial Reporting (DipIFR).
Nearly half a million professionals have advanced their careers through Becker Professional Education's
courses. Throughout its more than 50-year history, Becker has earned a strong track record of student success
through world-class teaching, curriculum and learning tools.
PL
*Platinum Moscow, Russia and Kiev, Ukraine. Gold Almaty, Kazakhstan
Together with ATC International, we provide a single destination for individuals and companies in need of global
accounting certifications and continuing professional education.
Becker Professional Education's ACCA Study Materials
All of Beckers materials are authored by experienced ACCA lecturers and are used in the delivery of classroom
courses.
Study System: Gives complete coverage of the syllabus with a focus on learning outcomes. It is designed to
be used both as a reference text and as part of integrated study. It also includes the ACCA Syllabus and Study
Guide, exam advice and commentaries and a Study Question Bank containing practice questions relating to
each topic covered.
Revision Question Bank: Exam style and standard questions together with comprehensive answers to
support and prepare students for their exams. The Revision Question Bank also includes past examination
questions (updated where relevant), model answers and alternative solutions and tutorial notes.
SA
Revision Essentials*: A condensed, easy-to-use aid to revision containing essential technical content and
exam guidance.
*Revision Essentials are substantially derived from content reviewed by ACCAs examining team.
PL
ACCA
PAPER F5
SA
M
PERFORMANCE MANAGEMENT
REVISION QUESTION BANK
For Examinations to June 2015
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
(i)
No responsibility for loss occasioned to any person acting or refraining from action as a result of any
material in this publication can be accepted by the author, editor or publisher.
This training material has been prepared and published by Becker Professional Development
International Limited:
16 Elmtree Road
Teddington
TW11 8ST
United Kingdom
Copyright 2014 DeVry/Becker Educational Development Corp. All rights reserved.

The trademarks used herein are owned by DeVry/Becker Educational Development Corp. or their
respective owners and may not be used without permission from the owner.
SA
M
PL
No part of this training material may be translated, reprinted or reproduced or utilised in any form either
in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage and retrieval system without
express written permission. Request for permission or further information should be addressed to the
Permissions Department, DeVry/Becker Educational Development Corp.
Acknowledgement
Past ACCA examination questions are the copyright of the Association of Chartered Certified
Accountants and have been reproduced by kind permission.
(ii)
REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

CONTENTS
Question
Page
Answer Marks
Date worked
FORMULAE
Formulae Sheet
(vii)
MULTIPLE CHOICE QUESTIONS

1001
1002
1004
1006
1008
1010
1011
1013
1014
1015
1016
1017
1019
1020
1021
1021
1023
18
24
20
20
18
18
14
14
20
6
26
18
14
14
14
20
18
1024
14
1
3
7
10
13
17
20
22
24
27
28
31
34
37
38
40
43
PL
Cost Accounting
Developments in Management Accounting
Relevant Cost Analysis
Cost Volume Profit Analysis
Limiting Factor Decisions
Pricing
Risk and Uncertainty
Budgeting
Quantitative Analysis in Budgeting
Budgeting and Standard Costing
Basic Variance Analysis
Advanced Variance Analysis
Behavioural Aspects of Standard Costing
Performance Measurement
Further Aspects of Performance Measurement
Divisional Performance Evaluation
Transfer Pricing
Performance Measurement and
Information Systems
SA
M
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
45
Section B of the Examination will include 10 and 15 mark questions (see Specimen Exam). Questions
with different mark allocations, as indicated below, are provided for further revision question practice.
More theoretical and non-past exam questions are provided for preparing to attempt exam standard
questions.
ACTIVITY BASED COSTING
1
2
Abkaber Co (ACCA D02)

Gadget Co (ACCA D10)
48
49
1025
1026
15
15
49
50
50
51
52
52
54
1028
1029
1031
1033
1033
1034
1036
20
10
15
10
10
15
10
DEVELOPMENTS IN MANAGEMENT ACCOUNTING

3
4
5
6
7
8
9
Environmental management accounting

Edward Co I (ACCA D07)
Wargrin I (ACCA D08)
Yam Co I (ACCA J09)
Yam Co II (ACCA J09)
Thin Co (ACCA J11)
Fit Co (ACCA D11)
(iii)
PERFORMANCE MANAGEMENT (F5) REVISION QUESTION BANK

Question
Page
Answer Marks
Date worked
RELEVANT COST ANALYSIS

10
11
12
13
Sniff Co (ACCA D07)

Bits and Pieces (ACCA J09)
Stay Clean (ACCA D09)
T Co (ACCA D11)
54
55
56
57
1036
1038
1039
1041
15
15
15
15
59
59
1042
1045
10
18
1046
1048
1049
1050
15
15
10
15
14
15
A to C Co
Nerville (ACCA DIP FM D08)
LIMITING FACTOR DECISIONS

Kobrin Engineers Co
Albion Co (ACCA J03)
Cut and Stitch (ACCA J10)
Cosmetic Co (ACCA D10)
60
61
62
63
Kadok Co
BIL Motor Components Co (ACCA)
Heat Co I (ACCA J11)
Heat Co II (ACCA J11)
64
65
66
66
1052
1055
1056
1057
15
10
10
10
67
67
68
69
70
71
71
1058
1060
1061
1062
1063
1064
1066
10
15
15
10
15
15
15
71
72
73
73
1069
1070
1071
1072
10
10
15
20
74
1073
10
74
1074
10
PRICING
20
21
22
23
SA
M
RISK AND UNCERTAINTY
PL
16
17
18
19
24
25
26
27
28
29
30
COST VOLUME PROFIT ANALYSIS
Decision tree
Stow Health Care (ACCA PP)
Shifters Haulage (ACCA D08)
Cement Co (ACCA J11 adapted)
Northland (ACCA J09)
Zero-based budgeting (ACCA D10)
PC Co (ACCA D11)
QUANTITATIVE TECHNIQUES FOR BUDGETING

31
32
33
34
Alex Co
Edward Co II (ACCA D07)
Henry Co (ACCA D08)
Big Cheese Chairs (ACCA D09)
BUDGETING AND STANDARD COSTING

35
Wargrin II (ACCA D08)
BASIC VARIANCE ANALYSIS

36
(iv)
Chaff Co I (ACCA J08)

Question
Page
Answer Marks
Date worked
37
38
39
40
41
AVX Co
Simply Soup I (ACCA Pilot Paper 2007)
Simply Soup II (ACCA Pilot Paper 2007)
Crumbly Cakes (ACCA J09)
Choc Co (ACCA D11)
75
76
77
77
78
1076
1077
1079
1080
1080
79
80
80
81
ADVANCED VARIANCE ANALYSIS

10
15
10
10
10
PLANNING AND OPERATIONAL VARIANCES

42
43
44
45
Spike Co I (ACCA D07)

Spike Co II (ACCA D07)
Chaff Co II (ACCA J08)
Carad Co (ACCA D10)
46
Oliver (ACCA J09)
10
10
10
15
PL
PERFORMANCE MEASUREMENT
1082
1084
1085
1086
82
1087
15
83
84
84
85
86
1089
1090
1092
1093
1094
15
15
10
10
20
87
88
89
1096
1098
1099
10
10
10
89
90
91
1099
1101
1102
10
15
15
1103
1106
1107
15
15
15
FURTHER ASPECTS OF PERFORMANCE MANAGEMENT

47
48
49
50
51
Education Ministry
Eatwell Restaurant (ACCA J02)
Jump I (ACCA J10)
Jump II (ACCA J10)
Accountancy Teaching Co (ACCA D10)
SA
M
DIVISIONAL PERFORMANCE EVALUATION

52
53
54
Osborne Co
Pace Co I (ACCA D08)
Pace Co II (ACCA D08)
TRANSFER PRICING
55
56
57
Business Solutions (ACCA J02)

Hammer (ACCA J10)
Bath Co (ACCA D11)
PERFORMANCE MANAGEMENT INFORMATION SYSTEMS

58
59
60
St Peregrines
Motor Components (ACCA D02)
Moffat (ACCA D05)
92
93
93
(v)

RECENT EXAMINATIONS1
Robber Co
Universal Health System
Not reproduced
Lock Co
Biscuits and Cakes
94
95
1109
1110
15
10
96
97
1112
1113
10
15
98
1115
15
DECEMBER 2012
1
Hair Co
2
Truffle Co (see Specimen Examination)
3
Web Co
4
Designit
5
Wash Co
99
100
101
JUNE 2013
1
2
3
4
5
102
102
103
105
106
1116
1118
1119
15
15
15
1122
1123
1125
1126
1127
10
15
10
15
10
108
109
110
111
112
1129
1130
1131
1133
1135
15
15
15
20
10
15
40
7
8
9
10
11
16
17
17
18
19
21
10
10
10
15
15
PL
Gym Bunnies
Squarize
Cam Co
Block Co
Newtown School
JUNE 2012
1
2
3
4
5
SA
M
DECEMBER 2013
1
Process Co
2
Solar Systems Co
3
Mic Co
4
Protect Against Fire Co
5
Bedco
SPECIMEN EXAM (applicable from December 2014)

Section A
Section B
1
2
3
4
5
20 Multiple Choice Questions
Brace Co
Cement
Brick by Brick
Thatcher International Park
Truffle Co
Marking scheme
All questions in these exams have been adapted to take account of the style of questions in the Specimen Exam.
(vi)

Formulae Sheet
Learning curve
Y = axb
Y = cumulative average time per unit to produce x units
a = the time taken for the first unit of output
x = the cumulative number of units produced
b = the index of learning (log LR/log 2)
LR = the learning rate as a decimal
Demand curve
P = a bQ
change in price
change in quantity
PL
b=
Where
a = price when Q = 0
SA
M
MR = a 2bQ
(vii)
SA
M
PL
(viii)

1
COST ACCOUNTING
1.1
Curtis runs a printing business. He estimates that his printing machine will need to be set-up
200 times per month, at a monthly total cost of $80,000. Item 2145 has to be printed in
batches of 50 copies, where each batch requires the machine to be set-up twice. Curtis
expects the total demand for item 2145 to be 5,000 copies per annum.
What amount should be charged to each copy of item 2145 for set-up costs?
Meadaw Co operates an activity based costing system. The budgeted costs for warehousing
for the next six months are $356,014, of which $215,414 is in respect of handling receipts of
materials. The balance is for the issue of goods to production. In the same period, it is
expected that 3,700 orders will be received and 2,500 issues will be made. The company has
received an order which will generate 14 receipts and 6 issues.
PL
1.2
$008
$192
$800
$1600
A
B
C
D
What is the warehousing cost to be included in the total cost of the order?
A
B
C
D
RS has recently introduced an activity based costing system. RS manufactures two products,
details of which are given below:
Product R
Product S
Budgeted production per annum (units)
80,000
60,000
Batch size (units)
100
50
Machine set-ups per batch
3
3
Processing time per unit (minutes)
3
5
SA
M
1.3
$33744
$81508
$1,14843
$1,15252
The budgeted annual costs for two activities are as follows:

Machine set-up
Processing
$
180,000
108,000
What is the budgeted machine set-up cost per unit of Product S?

A
B
C
D
1.4
$1.50
$1.80
$30
$150
The following statements have been made about activity based costing:
(1)
ABC recognises that some overhead costs do not depend directly on the volume of
output.
(2)
The cost of implementing activity based costing may exceed the benefits for some
businesses.

Which of the above statements is/are true?
A
B
C
D
(1)
(2)
It is not particularly relevant for service industry businesses.

It is based on marginal costing principles.
A
B
C
D
1 only
2 only
Neither 1 nor 2
Both 1 and 2
The budgeted overheads of Nambro for the next year have been analysed as follows:
PL
1.6
Which of the following statements about activity-based costing is/are true?
1.5
1 only
2 only
Neither 1 nor 2
Both 1 and 2
$000
450
180
640
Purchase order processing costs

Production run set up costs
Machine running costs
In the next year, it is anticipated that machines will run for 32,000 hours, 6,000 purchase
orders will be processed and there will be 450 production runs.
SA
M
One of the companys products is produced in batches of 500. Each batch requires a separate
production run, 30 purchase orders and 750 machine hours.
Using Activity Based Costing, what is the overhead cost per unit of the product?
A
B
C
D
1.7
$099
$159
$3530
$49500
The following statements have been made about activity-based costing (ABC) in a
manufacturing environment:
(1)
(2)
ABC eliminates the use of volume as a means of measuring costs.

Judgement may be required in selecting the drivers for a particular activity.
Which statements are true/false?

A
B
C
D
Statement 1
True
False
True
False
Statement 2
True
False
False
True

1.8
The following statements have been made about Activity Based Costing (ABC):
(1)
Introducing ABC will always reduce costs in the short term.
(2)
If the cost of a product or service using both ABC and absorption costing is the
same, there will be no benefit to be gained from adopting ABC.
Which of the statements is/are correct?
Themens Co uses activity based costing. The budgeted distribution costs for the next year
are:
$
Transport costs
2,631,200
Order processing
1,573,000
Total distribution costs

4,204,200
PL
1.9
1 only
2 only
Neither 1 nor 2
Both 1 and 2
A
B
C
D
It is estimated that in the next year, 325,000 orders will be processed and that the delivery
vehicles will travel 1,495,000 km.
A customer has indicated that 138 orders, each of which will require a journey of 122 km will
be placed in the next year.
SA
M
To the nearest $, what is the distribution cost for this customer?

A
B
C
D
$1,785
$30,299
$38,891
$47,342
(18 marks)
DEVELOPMENTS IN MANAGEMENT ACCOUNTING
2.1
A company operates a throughput accounting system. The details per unit of Product C are:
Selling price
Material cost
Labour cost
Overhead costs
Time on bottleneck resource
$28.50
$9.25
$6.75
$6.00
7.8 minutes
What is the throughput contribution per hour for Product C?

A
B
C
D
$50.00
$122.85
$121.15
$148.08

A company produces three products D, E and F. The statement below shows the selling price
and product costs per unit for each product, based on a traditional absorption costing system:
Selling price
Variable costs
Direct material
Direct labour
Variable overhead
Fixed overhead cost
Total product cost
Profit
Product D
$
32
Product E
$
28
Product F
$
22
10
6
4
9
29
8
4
2
6
20
6
4
2
6
18
4,000
25
5,000
15
Additional information:
3,000
20
PL
Demand per period (units)

Time in Process A (minutes)
2.2
Each of the products is produced using Process A which has a maximum capacity of 2,500
hours per period.
If a throughput accounting approach is used, what will be the ranking of products, in
order of priority, for the profit maximising product mix?
D, E, F
E, D, F
F, D, E
D, F, E
SA
M
A
B
C
D
2.3
2.4
Which of the following costs would be included in the life cycle costs of a product?
(1)
(2)
(3)
(4)
Planning and concept design costs.

Proto-type testing costs.
Product manufacturing costs.
Distribution and customer service costs.
A
B
C
D
All four costs

2, 3 and 4 only
1, 2 and 4 only
1, 3 and 4 only
Which costing approach identifies ways of making an acceptable profit margin on the
market price of a product or service?
A
B
C
D
Activity-based costing
Benchmarking
Life-cycle costing
Target costing

2.5
Hera Co is developing a new product using a target costing approach. The initial assumption
was that a sales volume of 200,000 units could be achieved at a selling price of $25 per unit.
However, market research indicates that to achieve the sales volume of 200,000 units, the
selling price should be $2350.
Hera wishes to obtain an average profit margin of 20% on sales.
The following data has been estimated for the product:
$1045 per unit
20 units
$64 per hour
$82 per hour (absorbed on a direct labour hour basis)
Direct material
Hourly production volume
Direct labour cost
Variable overheads
Fixed costs to produce 200,000 units are estimated to be $680,000.
A
B
C
D
2.6
$038
$115
$188
$235
PL
What reduction in the cost per unit is required in order to achieve the target cost per
unit?
Caward Co is planning to introduce a new product. The company seeks to obtain a 25%
margin on all products. The direct cost of the new product is $12450 per unit and the
overhead cost is $9120 per unit. Market research indicates that the likely selling price should
be $26500. You have been asked to carry out a target cost pricing exercise.
SA
M
What reduction in cost must be made to achieve the target cost?

A
B
C
D
2.7
$462
$1695
$2260
$8895
The following statements have been made about life-cycle costing:
(1)
(2)
(3)
It helps forecast a products profitability over its entire life.

It takes into account a products total costs over its entire life.
It focuses on the production of monthly profit statements throughout a products
entire life.
Which of the statements are true?

A
B
C
D
1 and 2 only
1 and 3 only
2 and 3 only
All three statements

2.8
The following statements have been made about environmental management accounting:
(1)
(2)
It provides information mainly for external parties.

It may include physical information about quantities of scarce resources used.

A
B
C
D
(1)
(2)
(3)
(4)
The following are all types of management accounting techniques:

Activity based costing
Life-cycle costing
Throughput accounting
Input output analysis
PL
2.9
1 only
2 only
Neither 1 nor 2
Both 1 and 2
Which of the above techniques might be used in environmental management

accounting?
A
B
C
D
2.10
1, 2 and 3 only
1, 3 and 4 only
1, 2 and 4 only
All of the above
Which of the following statements about the theory of constraints is NOT true?
It focuses on removing bottlenecks in production to improve throughput
Non-bottleneck resources should not be operated at full capacity
It can only be used in manufacturing organisations
It aims to reduce delays in meeting customer orders
SA
M
A
B
C
D
2.11
A product is manufactured in three consecutive processes; preparation, machining and

polishing. The time taken per unit and the total hours available per week are as follows:
Process
Hours per unit
Total hours available
Preparation
2
100,000
Machining
4
220,000
Polishing
3
120,000
Demand for the product is 50,000 units per week.

Which, if any, of the processes is the bottleneck?
A
B
C
D
Preparation
Machining
Polishing
None of the above

2.12
A textiles manufacturer makes three textiles at its Bigtown factory; Ax, By and Cz. The
dyeing process has been identified as a bottleneck resource.
Information about the three products is as follows:
Product
Selling price per metre
Material cost per metre
Other variable costs
Time taken in dyeing per metre
Ax
10
3.0
2.0
10 minutes
By
11
3.0
3.5
10 minutes
Cz
12.5
4.0
2.0
15 minutes
The manufacturer wishes to maximise throughout contribution.

What will be the ranking of the textiles in order of priority for the throughput
maximising production plan?
Ax, then By, then Cz
Cz, then By, then Ax
By, then Ax, then Cz
By, then Cz, then Ax
PL
A
B
C
D
(24 marks)
RELEVANT COST ANALYSIS
3.1
Albrecht has received a request to make a special version of one of its basic products. This
special version will use 2,000 units of material X.
SA
M
Material X is no longer used by Albrecht but there are 2,000 units left in inventory that had
been purchased at $400 per unit. The current purchase price is $475 per unit. Albrecht
believes it could sell material X for $300 per unit. However, material X is similar to material
Y that is currently in use by Albrecht and can be purchased for $650 per unit. It could use
material X in place of material Y however, it would cost $275 per unit to modify material
X so that it could be used in place of material Y.
What is the relevant cost per unit of material X for the manufacture of the special
version?
A
B
C
D
3.2
$300
$375
$400
$475
The value of a benefit sacrificed in favour of an alternative course of action.

Which term is best described by the definition above?
A
B
C
D
Incremental cost
Opportunity cost
Relevant cost
Variable cost

3.3
Nottingham Co is planning to use three staff members for a special project, but the company
needs to calculate whether the project will be profitable.
The full employment costs for the three staff involved in the project, for the life of the project,
would be $15,600. The cost of hiring agency staff to cover the work they would normally
undertake would be $21,400. Another alternative is for three regular staff to cover the work
of the staff involved in the project and to hire new additional staff to cover for these three
regular staff at a cost of $18,000.
What is the cost of staff that should be included in the calculation of the profitability of
the project?
A contract is under consideration which requires 600 labour hours to complete. There are 350
hours of spare labour capacity. The remaining hours for the contract can be found either by
weekend overtime working paid at double the normal rate of pay or by diverting labour from
the manufacture of product QZ. If the contract is undertaken and labour is diverted, then sales
of product QZ will be lost. Product QZ takes three labour hours per unit to manufacture and
makes a contribution of $12 per unit. The normal rate of pay for labour is $9 per hour.
PL
3.4
$5,800
$15,600
$18,000
$21,400
A
B
C
D
What is the total relevant cost of labour for the contract?

$1,000
$2,250
$3,250
$4,500
SA
M
A
B
C
D
3.5
Park Co is developing a number of new products. New legislation means that one of these
products will not be viable unless additional expenditure, estimated at $450,000, is
undertaken. This amount excludes $200,000 which is the estimate of the contribution which
will be lost through the delay to another project due to the transfer of resources.
To date $47 million has been spent on the project. It is estimated that before the change in
legislation, $21 million was required to bring the product to the launch stage.
What is the sunk cost of the project?
A
B
C
D
3.6
$200,000
$450,000
$2,100,000
$4,700,000
A machine is no longer used by a company. It could be sold now for net proceeds of $300.
Its only other use is on a short-term contract which is under consideration. The variable
running costs of the machine during the period of the contract would be $400. On completion
of the contract the machine would have no realisable value and would cost $150 to dismantle
and remove.

What is the total relevant cost of using the machine on the contract?
A
B
C
D
A company is evaluating a new contract which requires 400 kg of raw material M. It has 100
kg of material M in inventory which were purchased recently. Since then the purchase price
of material M has risen by 4% to $52 per kg. Raw material M is used regularly by the
company in normal production.
What is the relevant cost of material M for the contract?
3.8
Which of the following best describes the term relevant cash flow?
A
B
C
D
3.9
$20,000
$20,600
$20,800
$21,632
PL
A
B
C
D
3.7
$450
$550
$700
$850
The benefit which would have been obtained from the best alternative foregone
The difference in future operating cash flows resulting from a decision
A future cash flow which cannot be avoided
All cash flows, including financing cash flows, arising from a project
A company is evaluating a project that requires two types of material (T and V).
SA
M
Data relating to the material requirements for the project are as follows:
Material
type
Quantity
needed
kg
500
400
T
V
Quantity
Original cost of
currently
quantity
in inventory
in inventory
kg
$/kg
100
40
200
55
Current
purchase
price
$/kg
45
52
Current
resale
price
$/kg
44
40
Material T is regularly used by the company in normal production. Material V is no longer in

use by the company and has no alternative use within the business.
What is the total relevant cost of materials for the project?
A
B
C
D
3.10
$40,400
$40,900
$43,400
$43,900
A machine owned by a company has been idle for some months but could now be used on a
one year contract which is under consideration. The net book value of the machine is $1,000.
If not used on this contract, the machine could be sold now for a net amount of $1,200. After
use on the contract, the machine would have no saleable value and the cost of disposing of it
in one years time would be $800.

What is the total relevant cost of the machine to the contract?
A
B
C
D
$400
$800
$1,200
$2,000
(20 marks)
COST VOLUME PROFIT ANALYSIS
4.1
Mario operates a small business that makes pizzas and delivers them within a two-mile radius.
The variable cost incurred to make and deliver one pizza is $215. The average price charged
is $650 per pizza, including delivery.
Mario estimates the annual fixed costs of his business are $40,000, including salaries of
$24,000.
A
B
C
D
A division manufacturing a single product which sells for $325 has the following unit cost
structure:
$
Direct materials
95
Direct labour
78
Variable overheads
56
Share of fixed costs
45
Total cost
274
In the coming period, the budgeted production volume is 10,000 units.
SA
M
4.2
3,678
6,154
9,195
18,605
PL
What is the breakeven number of pizzas per year for Marios business?
What is the budgeted breakeven sales volume (to the nearest unit)?
A
B
C
D
4.3
1,385 units
4,688 units
8,824 units
10,000 units
Graytun Co has a production capacity of 280,000 units per annum. The budgeted sales
volume for the next year is 256,000 units and the break even volume is 167,000 units.
What is the margin of safety ratio?
A
B
C
D
10
3179%
3477%
5329%
6523%

4.4
Benown Co manufactures a single product which has a variable cost of $17 and currently sells
for $30. The budgeted sales volume is 25,000 units per month and the budgeted fixed costs
are $250,000 per month. The divisional manager is considering reducing the price to $27 to
stimulate sales. He also wishes to increase the monthly profit by 10%.
What volume of sales is required at the new selling price to increase profit by 10%?
A
B
C
D
Morava Co produces a product which has a variable cost of $28 and a selling price of $39.
Budgeted sales and production volumes for the next month are 18,000 units. Budgeted fixed
costs are $121,000 per month.
4.5
19,559
32,250
33,250
43,250
A
B
C
D
4.6
1,000
10,000
11,000
12,000
PL
If Morava wishes to generate a profit of $11,000, how many units must be sold?
Jim Bowen has been trading for the last six months as a fast food retailer. His average
contribution sales(C/S) ratio for that period was 33%, on sales of $120,000. His total fixed
expenses were $25,800. He is considering employing an extra member of staff as he
anticipates an increase in business. The cost of the new employee will be $18,000 per annum.
To stimulate sales, Jim will also reduce his C/S ratio) to 30%.
SA
M
What percentage increase in sales is needed for Jim to earn the same net profit in the
next six months as he earned in the first six months?
A
B
C
D
4.7
2166%
2500%
3500%
6000%
A company manufactures one product which it sells for $40 per unit. The product has a
contribution to sales ratio of 40%. Monthly total fixed costs are $60,000. At the planned
level of activity for next month, the company has a margin of safety of $64,000 expressed in
terms of sales value.
What is the planned activity level (in units) for next month?
A
B
C
D
3,100
4,100
5,350
7,750
11

4.8
A break-even chart for a company is depicted as follows:

$
Sales revenue
Total costs
Units
4,000
PL
Which one of the following statements is consistent with the above chart?
Both selling price per unit and variable cost per unit are constant.
Selling price per unit is constant but variable cost per unit increases for sales over
4,000 units.
Variable cost per unit is constant but the selling price per unit increases for sales
over 4,000 units.
Selling price per unit increases for sales over 4,000 units and there is an increase in
the total fixed costs at 4,000 units.
SA
M
4.9
Four lines representing expected costs and revenue have been drawn on a break-even chart:
C
D
Output
Which line represents total variable cost?

A
B
C
D
12
Line A
Line B
Line C
Line D

4.10
A company makes and sells three products,

statements are as follows:
R
$
Sales
10,000
Variable cost of sales 4,000
Fixed costs*
3,000
Profit
3,000
R, S and T. Extracts from the weekly profit

S
$
15,000
9,000
3,000
3,000
T
$
20,000
10,000
3,000
7,000
Total
$
45,000
23,000
9,000
13,000
* general fixed costs absorbed using a unit absorption rate

If the mix of products produced and sold is changed to: R 20%, S 50%, T 30% what
impact would this have on the weighted average contribution to sales ratio?
It would be increase
It would be decrease
It would remain unchanged
It cannot be determined without more information
PL
A
B
C
D
(20 marks)
LIMITING FACTOR DECISIONS
5.1
A company produces three products, D, E and F. The statement below shows the selling price
and product costs per unit for each product, based on a traditional absorption costing system:
SA
M
Selling price per unit

Variable costs per unit
Direct material
Direct labour
Variable overhead
Fixed cost per unit
Total product cost
Additional information:
Time in process A (minutes)
D
32
E
28
F
22
10
6
4
9
29
8
4
2
6
20
6
4
2
6
18
20
25
15
Process A time is limited to 2,500 hours per period.

If a traditional contribution approach is used, what will be the ranking of products, in
order of priority, in order to maximise profit?
A
B
C
D
D, E, F
E, D, F
F, D, E
D, F, E
13

5.2
Ardvec makes four products which sell in roughly equal volume. Data in respect of each
product is shown below:
Per unit
Selling price
Variable cost
Direct labour hours
Economy
$28
$13
017
Standard
$32
$16
Premium
$37
$20
022
Deluxe
$40
$22
028
031
In the coming period, a shortage of direct labour means that Ardvec can only manufacture
three products.
5.3
Economy
Standard
Premium
Deluxe
PL
A
B
C
D
In order to maximise short term profit which product should NOT be produced?
The following statements have been made about outsourcing:

(1)
(2)
Outsourcing an activity always leads to short-term cost savings.

Outsourcing an activity normally reduces the risk of under-utilising the resources
used in undertaking the activity internally.
Which of the above statements is true/false?

Statement 1
True
False
True
False
SA
M
A
B
C
D
5.4
Statement 2
False
True
True
False
Cornaur Products uses a scarce material in the manufacture of four products. Data per unit of
each product is shown below:
Selling price
Variable cost
Material input (kgs)
Y
$3872
$3058
W
$2986
$2556
S
$4117
$3419
E
$3125
$2053
17
15
19
16
In the next period, insufficient material will be available to manufacture all four products and
therefore one product must be discontinued.
In order to maximise short-term profit, which product should be discontinued?
A
B
C
D
14
Y
W
S
E

5.5
The following graph relates to a linear programming problem:
y
(1)
(2)
(3)
PL
The objective is to maximise contribution and the dotted line on the graph depicts this
function. There are three constraints which are all of the less than or equal to type which
are depicted on the graph by the three solid lines labelled (1), (2) and (3).
At which intersection is contribution maximised?
A
B
C
D
A company manufactures and sells two products (X and Y) which have contributions per unit
of $8 and $20 respectively. The company aims to maximise profit. Two materials (G and H)
are used in the manufacture of each product. Both materials are in short supply; only 1,000
kg of G and 1,800 kg of H are available next period. The company holds no inventory and it
can sell all the units produced.
SA
M
5.6
Constraints (1) and (2)

Constraint (1) and the x-axis
The management accountant has drawn the following graph accurately showing the
constraints for materials G and H:
Product Y
(units)
Material G
100
90
Material H
125
150
Product X
(units)
15

What is the optimal mix of production (in units) for the next period?
Product X
0
50
60
125
A
B
C
D
A company manufactures two products (L and M) using the same material and labour. It
holds no inventory. Information about the variable costs and maximum demands are as
follows:
Product M
$ per unit
19
28
Units
8,000
PL
Product L
$ per unit
Material ($4 per litre)
13
Labour ($7 per hour)
35
Units
Maximum monthly demand
6,000
5.7
Product Y
90
60
50
0
Each month 50,000 litres of material and 60,000 labour hours are available.
Which one of the following statements is correct?
A
B
C
D
A company which manufactures and sells two products (X and Y) aims to maximise its
profits. It holds no inventory. Product X makes a contribution per unit of $4 and product Y
makes a contribution per unit of $1.
SA
M
5.8
Material is a limiting factor but labour is not a limiting factor

Material is not a limiting factor but labour is a limiting factor
Neither material nor labour is a limiting factor
Both material and labour are limiting factors
Next period the company faces three less than production constraints and these are shown
as the lines labelled (1), (2) and (3) on the following graph:
Product Y
000 units
11
10
9
(3)
(2)
5
4
3
2
1
16
(1)
2 3
L
6 7
9 10 11 12 13 14
Produkt X
000 units

Which point represents the optimal solution for the next period?
A
B
C
D
5.9
Point H
Point J
Point K
Point L
A manufacturing company prices its product to give a mark-up of 100% on variable cost. If
the selling price is increased by 50%, quantity sold is expected to be reduced by 40% but the
variable cost per unit is expected to remain unchanged.
Total contribution
Decrease
Increase
Increase
Decrease
PL
Revenue
Increase
Decrease
Increase
Decrease
A
B
C
D
What will be the effect on revenue and total contribution of the change in pricing
policy?
(18 marks)
PRICING
6.1
A shopkeeper finds that if he sets the price of a particular product at $9.00 per unit he sells, on
average, 150 units of the product per month. However, at a price of $10.00 per unit, he sells
an average of 110 units per month.
What is the price elasticity of demand for the product?
0.42
2.40
0.27
0.11
SA
M
A
B
C
D
6.2
Posquade Co produces a single product. Budgeted sales volume for the next three month
periods is 50,000 units. Production capacity is 18,000 units per month. The following per
unit information is available:
$
$
Selling price
160
Variable cost
80
Fixed overheads
33
Total cost
113
Profit
47
A potential overseas customer has requested a price for an initial order of 3,000 units over the
next three months.
Assuming that Posquade Co wishes to ensure that short-term profit is not reduced if the
enquiry becomes an order, what is the minimum price per unit that should be quoted?
A
B
C
D
$80
$113
$146
$160
17

6.3
The following statements have been made about pricing policies:

(1)
A pricing policy which is appropriate when the price sensitivity of demand is

unknown.
(2)
A pricing policy which is likely to discourage competitors from entering the market.
(3)
A pricing policy which is likely to encourage competitors to enter the market.
A
B
C
D
The cost per unit of a product manufactured by Arbor Co is:

Direct material
Direct labour
Direct overheads
Share of fixed costs
Total cost
$
12
17
7
12
48
PL
6.4
1 and 2
1 and 3
2 and 3 only
Which of the above statements can apply to market skimming?
Arbor uses marginal cost plus pricing.
If Arbor seeks a 40% margin on sales, what is the selling price of the product?
$5040
$6000
$6720
$8000
SA
M
A
B
C
D
6.5
The following statements have been made about sales pricing policies:
(1)
Market skimming will lead to a constant price throughout the products life
(2)
Cost plus pricing will lead to profit being maximised

A
B
C
D
6.6
If a 6% fall in price causes a 9% increase in demand for a particular item, what is its
price elasticity of demand?
A
B
C
D
18
1 only
2 only
Neither 1 nor 2
Both 1 and 2
More than one

Positive but less than one
Zero
Between zero and minus one

6.7
A firm sells its product at $20 per unit in order to achieve its objective of maximising profits.
Selling price ($P) is related to quantity sold (Q) by the following equation:
P = 30 0.0002Q
If there are no opening or closing inventories, what is the marginal cost of production at
the optimum level of output?
Edmonds Co has established its cost and demand functions. Total cost at various levels of
output and the selling price that will achieve these levels of demand are as follows:
Production/sales
(units)
1,000
2,000
3,000
4,000
5,000
6,000
Total cost
$000
500
550
625
725
850
1,000
Selling price
$ per unit
350
300
250
200
150
100
PL
6.8
Zero
$10
$15
$20
A
B
C
D
At what level of demand is profit maximised?

2,000
3,000
4,000
5,000
SA
M
A
B
C
D
6.9
Abel Co currently sells its major product line for $25, at which price monthly demand is
4,000 units. Market research has suggested that a cut in price of $1 would increase monthly
sales by 800 units and that the demand curve is linear.
If P denotes selling price in $ and Q monthly demand in thousands of units, which of the
following correctly describes the demand curve?
A
B
C
D
P
P
P
P
=
=
=
=
30 0.00125Q
30 1.25Q
24 0.8Q
24 800Q
(18 marks)
19

7
RISK AND UNCERTAINTY
7.1
The committee of a new golf club is setting the annual membership fee. The number of
members depends on the membership fee charged and economic conditions. The forecast
annual cash inflows from membership fees are shown below:
$600
Economic conditions:
Low
Average
High
400
440
480
360
405
495
$1,000
320
380
420
360
480
540
Membership Fee
$800
$900
A
B
C
D
The following statements have been made about expected values:

(1)
Expected value is of limited use for decisions regarding outcomes which will be
repeated often.
(2)
Using expected value in decision-making can lead to the worst possible outcome
being ignored.
(3)
The reliability of expected value calculations is heavily influenced by the accuracy

of the probabilities assigned to outcomes.
SA
M
7.2
$600
$800
$900
$1,000
PL
Applying the minimax regret criterion, what fee would be set by the committee?
Which of the statements are correct?

A
B
C
D
7.3

1 and 2 only
1 and 3 only
2 and 3 only
The following statements have been made about the use of expected values in decision
making:
(1)
(2)
Expected values ignore the risk associated with decisions.

Expected values are most useful for recurring rather than one-off events.

A
B
C
D
7.4
20
1 only
2 only
Neither 1 nor 2
Both 1 and 2
PT provides expert quality assurance services on a consultancy basis. The management of the
company is unsure whether to price the services it offers at the Deluxe, High, Standard or
Low fee level. There is uncertainty about the mix of staff that would be available to provide
each of the services. As the staff are on different pay scales the mix of staff would affect the
variable costs of each service.

The table below details the annual contribution earned from each of the possible outcomes.
Staffing mix
X
Y
Z
Deluxe
$135,000
$150,000
$165,000
Fee level
High
Standard
$140,000
$137,500
$160,000
$165,000
$180,000
$192,500
Low
$120,000
$160,000
$200,000
If PT applies the minimax regret criterion, what fee level it will it choose?
NG is deciding which of four potential venues should be used to stage an entertainment event.
Demand for the event may be low, medium or high depending on weather conditions on the
day. The management accountant has estimated the contribution that would be earned for
each of the possible outcomes and has produced the following regret matrix:
Venue
Demand
Low
Medium
High
PL
7.5
Deluxe
High
Standard
Low
A
B
C
D
Ayefield
$0
$330,000
$810,000
Regret Matrix
Beefield
Ceefield
$200,000
$110,000
$590,000
$300,000
$0
$480,000
Deefield
$450,000
$150,000
$0
If the company applies the minimax regret criterion, which venue would be chosen?
Ayefield
Beefield
Ceefield
Deefield
SA
M
A
B
C
D
7.6
FP can choose from three mutually exclusive projects. The net cash flows from the projects
will depend on market demand. All of the projects will last for only one year. The forecast
net cash flows and their associated probabilities are given below:
Market demand
Probability
Project A
Project B
Project C
Weak
0.30
400
300
500
Average
0.50
500
350
450
Good
0.20
600
400
650
FP can commission a forecast that would tell it with certainty what demand conditions will be
before the decision is made about which project to invest in.
What is the maximum amount that FP should pay for the forecast?
A
B
C
D
$530
$505
$25
$0
21

7.7
A company is considering whether to develop and market a new product. The cost of
developing the product is estimated to be $150,000. There is a 70% probability that the
development will succeed and a 30% probability that the development will be unsuccessful.
If the development is successful the product will be marketed. There is a 50% chance that the
marketing will be very successful and the product will make a profit of $250,000. There is a
30% chance that the marketing will be reasonably successful and the product will make a
profit of $150,000 and a 20% chance that the marketing will be unsuccessful and the product
will make a loss of $80,000. These profit and loss amounts take account of the $150,000
development cost.
A
B
C
D
What is the expected value of the decision to develop and market the product?
$154,000
$107,800
$62,800
$4,000
PL
(14 marks)
BUDGETING
8.1
Which of the following describes a flexed budget?
One that is set prior to the control period and not subsequently changed in response
to changes in activity, costs or revenues
One that is continuously updated by adding a further accounting period when the
earliest accounting period has expired
One that is changed in response to changes in the level of activity
One that is changed in response to changes in costs
SA
M
8.2
The finance function of Bagnall Co has been asked to oversee the production of the
companys budgets for the forthcoming year. In their initial instructions to the companys
various divisions the finance function has stressed that once budgets for next year have been
formally agreed steps will be taken to maintain their ongoing relevance by undertaking a
monthly review of budgets for forthcoming months in the light of performance in earlier
months.
Which of the following best describes this approach to budgeting?
A
B
C
D
22
Flexible budgeting
Incremental budgeting
Zero-based budgeting
Rolling budgeting
A method of budgeting where an attempt is made to make each cost heading as

close to zero as possible.
A method of budgeting whereby all activities are re-evaluated each time a budget is
formulated.
A method of budgeting which recognises the difference between the behaviour of

fixed and variable costs with respect to changes in output and is designed to change
appropriately with such fluctuations.
A method of budgeting where the sum of revenues and expenditures in each cost
centre must equal zero.
8.4
Which of the following definitions best describes Zero-Based Budgeting?
The following statements have been made about a flexed budget:

(1)
(2)
(3)
(4)
It allows managers to plan for alternative contingencies

It makes no differentiation between fixed and variable costs
It assists in identifying limiting factors
It provides useful control information
PL
8.3
Which of the above statements are correct?

A
B
C
D
Amelpa Manufacturing Co manufactures a range of industrial products. The budgeted costs

of the maintenance section for the current twelve month period have been analysed as
follows:
$
Routine maintenance
151,000
Production line set up
42,000
Total
193,000
SA
M
8.5
1, 2 and 3 only
1, 3 and 4 only
1, 2 and 4 only
2, 3 and 4 only
The budget was prepared on the basis that there will be 720 set ups and that 10,080 machine
hours will be worked. The company has received an enquiry for an order which requires
three set ups and will take 56 machine hours.
How much (to the nearest $1) should be included in the cost of the order in respect of
maintenance costs?
A
B
C
D
$804
$1,014
$1,072
$4,106
23
8.7
Which of the following statements about programme planning and budgeting is correct?
A
The objective of programme planning and budgeting is to minimise the input

resources
Programme planning and budgeting seeks to allocate resources to programmes on

the basis of anticipated profitability
Programme planning and budgeting may measure outputs using non-financial

measures
Programme planning and budgeting is usually carried out over a short time frame
The following statements have been made about different types of budgets:
8.6
Statement 1
Statement 2
PL
An annual budget that can be broken down into monthly budgets, which differ depending on
the number of working days in each month, is called a flexible budget.
An annual budget set before the start of a year based on estimated sales and production
volumes is called a fixed budget.
Statement 1
True
False
False
True
Statement 2
False
True
False
True
SA
M
A
B
C
D
(14 marks)
QUANTITATIVE ANALYSIS IN BUDGETING
9.1
The budgeted costs for a company at different levels of output are as follows:
Output
24,000 units
30,000 units
35,000 units
Total costs
$304,000
$352,000
$392,000
The variable cost per unit will reduce by 5% for output levels above 40,000 units. The
reduced cost per unit will apply to all units. Fixed costs will increase by $30,000 for output
levels above 38,000 units.
What are the budgeted total costs for an output level of 45,000?
A
B
C
D
24
$454,000
$472,000
$484,000
$504,000

9.2
Hightech is a computer hardware repair company. The total overhead costs and labour hours
booked to jobs for the last two months have been:
April
May
Total overhead costs
$107,980
$101,050
Total labour hours
2,560
2,350
What is the variable overhead cost per labour hour?
Demdisc manufactures computer equipment. Data extracted from the budget for three months
is shown below:
Month 1
Month 2
Month 3
Total overheads
$442,500
$439,060
Machine hours
7,500
7,420
7,150
PL
9.3
$3300
$4218
$4257
$4300
A
B
C
D
What will be the budgeted total overheads for Month 3?

A
B
C
D
9.4
$421,850
$422,463
$423,083
$427,450
A company is estimating its costs based on past information.
SA
M
The total costs incurred by the company at different levels of output were as follows:
Output
(units)
160,000
185,000
190,000
Total costs
$
2,420,000
2,775,000
2,840,000
Using the high-low method to separate total costs into their fixed and variable elements the
company has now established that there is a stepped increase in fixed costs of $30,000 when
output reaches 180,000 units. Inflation is ignored.
What estimate of total costs should be made for an output of 175,000 units?
A
B
C
D
9.5
$2,645,000
$2,275,000
$2,615,000
$2,630,000
The flexed budgets for two levels of activity are as follows:

Production (units)
Budgeted total cost
Level 1
10,000
$81,900
Level 2
20,000
$126,060
The budgeted total cost figures reflect that there is a step-up in the total fixed cost of 15%,
which occurs when production reaches 15,000 units. The variable production cost per unit
remains constant in the range 10,000 to 20,000 units.
25

What is the total cost associated with a flexed budget for 16,000 units of production?
A
B
C
D
9.6
$104,400
$108,396
$111,060
$114,057
When the budget for the three months to 30 April was prepared, the expected level of
production was 20,000 units and the budgeted production overhead was $178,400. This
included $42,000 of fixed costs, with the remainder estimated to vary with the level of
production.
Actual production in the three months to 30 April was 21,220 units.
A
B
C
D
9.7
Which of the following is an assumption of learning curve theory?

A
B
C
D
The reduction in unit time will follow a predictable pattern

Unit time will decrease at an increasing rate
The time required to do a task will vary randomly each time the task is repeated
Learning will not be transferred from one worker to the next
You have just timed a person doing a job a few times. The first time it took the person 25
minutes, the second time it took 20 minutes and the third time it took 17.55 minutes.
SA
M
9.8
$144,72040
$186,72040
$189,28240
$231,28240
PL
What is the flexed production overhead budget for the three months to 30 April?
Which learning rate should you use?

A
B
C
D
9.9
10%
20%
80%
90%
You have determined that a 75 percent learning curve is appropriate for a task. (For a
learning rate of 75% the value of the index of learning b is -0.4150375.) The initial timing of
the person performing that job was 50 minutes.
If the task needs to be performed 500 times, how many minutes of work will be
required?
A
B
C
D
26
3,184 minutes
1,896 minutes
1,379 minutes
636.8 minutes

9.10
You have just timed a person doing a haircut for the first time. It took 50 minutes.
What learning rate should be used if the person took 35 minutes on the second haircut?
A
B
C
D
15%
30%
70%
85%
(20 marks)
BUDGETING AND STANDARD COSTING
10.1
What is a basic standard?
A standard set at an ideal level, which makes no allowance for normal losses, waste
and machine downtime.
A standard which assumes an efficient level of operation, but which includes

allowances for factors such as normal loss, waste and machine downtime.
A standard which is kept unchanged over a period of time.
A standard which is based on current price levels.
PL
Which of the following best describes management by exception?

A
Using management reports to highlight exceptionally good performance, so that

favourable results can be built upon to improve future outcomes.
Sending management reports only to those managers who are able to act on the
information contained within the reports.
Focusing management reports on areas which require attention and ignoring those
which appear to be performing within acceptable limits.
Appointing and promoting only exceptional managers to areas of responsibility

within the organisation.
SA
M
10.2
10
10.3
Which of the following statements about flexed budgets is/are correct?

(1)
The flexed budget is prepared at the same level of activity as actual output.
(2)
The difference between the flexed budget profit and the actual profit shows the
effect on profit of operating at a level of activity that differs from the expected level.
A
B
C
D
1 only
2 only
Neither 1 nor 2
Both 1 and 2
(6 marks)
27

Answer 2 GADGET CO
(a)

Cost drivers
Cost driver
36 production runs (16 + 12 + 8)
32,100 machine hours (7,500 + 8,400 + 16,200)
94 purchase orders (24 + 28 + 42)
140 deliveries (48 + 30 + 62)
Cost per machine set up

Cost per machine hour
Cost per order
Cost per delivery
$
26,550
66,400
48,000
54,320
195,270
$26,550/36 = $73750
$66,400/32,100 = $20685
$48,000/94 = $5106383
$54,320/140 = $388
PL
Cost pools
Machine set up costs
Procurement costs
Delivery costs
Allocation of overheads to each product:
B
$
8,850
17,375
14,298
11,640
52,163
C
$
5,900
33,510
21,447
24,056
84,913
15,000
12,000
18,000
$
388
$
435
$
472
A
$
24
148
388
776
B
$
36
222
435
1017
C
$
48
296
472
1248
SA
M
Machine set up costs

Procurement costs
Delivery costs
A
$
11,800
15,514
12,255
18,624
58,193
Number of units produced

Overhead cost per unit
Total cost per unit
Materials
Labour
Overheads
1026
Total
$
26,550
66,400
48,000
54,320
195,270

(b)
How ABC may improve profitability
When comparing the full unit costs for each of the products under absorption costing as
compared to ABC, the following observations can be made:
Product A
PL
Product B
The unit cost for product A is 16% higher under ABC as opposed to traditional absorption
costing. Under ABC, it is $776 per unit compared to $671 under traditional costing. This is
particularly significant given that the selling price for product A is $750 per unit. This
means that when the activities that give rise to the overhead costs for product A are taken into
account, product A is actually making a loss. If the company wants to improve profitability it
should look to either increase the selling price of product A or somehow reduce the costs.
Delivery costs are also high, with 48 deliveries a year being made for product A. Maybe the
company could seek further efficiencies here. Also, machine set up costs are higher for
product A than for any of the other products, due to the larger number of production runs.
The reason for this needs to be identified and, if possible, the number of production runs
needs to be reduced.
The difference between the activity based cost for B as opposed to the traditional cost is quite
small, being only $010. Since the selling price for B is $12, product B is clearly profitable
whichever method of overhead allocation is used. ABC does not really identify any areas for
concern here.
Product C
SA
M
The unit cost for C is 7% lower under ABC when compared to traditional costing. More
importantly, while C looks like it is making a loss under traditional costing, ABS tells a
different story. The selling price for C is $13 per unit and, under ABC, it costs $1248 per
unit. Under traditional absorption costing, C is making a loss of $042 per unit. Identifying
the reason for the differences in C, it is apparent that the number of production runs required
to produce C is relatively low compared to the volumes produced. This leads to a lower
apportionment of the machine set up costs to C than would be given under traditional
absorption costing. Similarly, the number of product tests carried out on C is low relative to
its volume.
ABC is therefore very useful in identifying that C is actually more profitable than A, because
of the reasons identified above. The company needs to look at the efficiency that seems to be
achieved with C (low number of production runs less testing) and see whether any changes
can be made to A, to bring it more in line with C. Of course, this may not be possible, in
which case the company may consider whether it wishes to continue to produce A and
whether it could sell higher volumes of C.
1027

Answer 3 ENVIRONMENTAL MANAGEMENT ACCOUNTING
Tutorial note: It is highly unlikely that a question in Section B would be devoted entirely to this topic.
This question is provided for revision of this topic and is not representative of an exam question.
(a)
Meaning of environmental costs
Various organisations have come up with different definitions of environmental cost so there
is no definitive answer to the question what is meant by environmental costs. In most cases,
the term environmental costs is taken to mean any costs that have relevance to the
environment. The following are perhaps the most significant of these:
Costs of waste, particularly wasting scarce resources, such as energy and water.
Here poor environmental behaviour costs more than good environmental behaviour.
Costs incurred to protect the environment such as investing in production processes

to reduce pollution.
Costs of compliance with environmental regulations or voluntary codes. This may

include employment of compliance officers, and monitoring equipment.
Costs of cleaning up pollution or contamination caused by activities. Some such

costs may not become payable until operations cease (e.g. decontamination of the
site on which a nuclear power station stands). However, such costs can be
significant.
Image and relationship costs. The environment is an important political issue.

Many organisations that have committed environmental crimes have suffered as a
result of product boycotts, which have affected their bottom line. Many
organisations spend huge amounts to publicise their environmental credentials.
SA
M
PL
(b)
Why the management of environmental costs is becoming increasingly important
There are three main reasons why the management of environmental costs is becoming
increasingly important.
(c)
(1)
Increasing awareness of environmental issues means that organisations are expected

to behave in an environmentally friendly way, as discussed above.
(2)
Environmental costs account for a huge portion of costs for many industrial
companies. As such they need to be managed.
(3)
Increasing regulation by governments means that costs of non-compliance (e.g.

fines) are becoming ever larger.
Weakness of traditional management accounting
Traditional management accounting systems do not provide management with enough

information about the impact of the organisations environmental costs. Many environmental
related costs are simply included in general overheads, so management are not aware of them.
Since managers are not aware of them, they have no information with which to manage them
and no incentive to reduce them.
1028
Since traditional management accounts do not provide management with an accurate view of
environmental costs, management make decisions that are bad for the environment and bad
for the organisations profits. Many organisations, for example, spend too much on energy
due to inefficient practices and waste. Good energy management would reduce the waste,
thus conserving a scarce resource, and reducing the costs of energy.
(d)
Environmental management accounting
As with environmental costs, there is an absence of a clear definition of environmental

management accounting. Many organisations have provided definitions, many of which
contain much jargon and are not very clear.
Management accounting aims to provide detailed information to managers of an organisation,

to help them plan and control its activities, and make decisions. Environmental management
accounting is simply an extension of this, whereby information is provided to management to
help them to manage the environmental costs and activities.
PL
Environmental management accounting does not provide only financial information. The
United Nations Division for Sustainable Development distinguishes between:
Physical information such as the use, flows and destinies of energy, water and
materials, including waste.
Monetary information on environment related costs, earning and savings.
SA
M
Environmental management accounting makes use of management accounting techniques

such as activity-based costing (ABC), and life cycle costing, which can be used to manage
environmental costs more effectively. In ABC, for example, the drivers that cause
environmental costs to be incurred can be identified. Managers can then take steps to reduce
the use of the drivers, so that the environmental costs are reduced without reducing the output
of the organisation.
Environmental management accounting makes managers more aware of the costs of their
environmental activities. If they are more aware, they can manage them more effectively.
Tutorial note: This solution is not the definitive solution to such a question. It has been
provided to give a general view of the issues, without becoming too involved in the jargon
of the various definitions that have been provided. As such it is probably longer than the
marking scheme would warrant. The examiner stated that she would not set a whole question
on environmental management accounting. Any questions on this area would appear for up
to eight marks as part of a 20-mark question. The examiner also stated that she would not set
numerical questions on this area.
Answer 4 EDWARD CO I
(a)
Target costing process
Target costing begins by specifying a product an organisation wishes to sell. This will
involve extensive customer analysis, considering which features customers value and which
they do not. Ideally only those features valued by customers will be included in the product
design.
The price at which the product can be sold at is then considered. This will take in to account
the competitor products and the market conditions expected at the time that the product would
be launched. Hence a heavy emphasis is placed on external analysis before any consideration
is made of the internal cost of the product.
1029
From the above price a desired margin is deducted. This can be a gross or a net margin. This
leaves the cost target. An organisation will need to meet this target if their desired margin is
to be met.
Costs for the product are then calculated and compared to the cost target mentioned above.
If it appears that this cost cannot be achieved then the difference (shortfall) is called a cost
gap. This gap would have to be closed, by some form of cost reduction, if the desired margin
is to be achieved.
Benefits of adopting target costing
The organisation will have an early external focus to its product development.
Businesses have to compete with others (competitors) and an early consideration of
this will tend to make them more successful. Traditional approaches (by calculating
the cost and then adding a margin to get a selling price) are often far too internally
driven.
Only those features that are of value to customers will be included in the product
design. Target costing at an early stage considers carefully the product that is
intended. Features that are unlikely to be valued by the customer will be excluded.
This is often insufficiently considered in cost plus methodologies.
Cost control will begin much earlier in the process. If it is clear at the design stage
that a cost gap exists then more can be done to close it by the design team.
Traditionally, cost control takes place at the cost incurring stage, which is often
far too late to make a significant impact on a product that is too expensive to make.
Costs per unit are often lower under a target-costing environment. This enhances
profitability. Target costing has been shown to reduce product cost by between
20% and 40% depending on product and market conditions. In traditional cost plus
systems an organisation may not be fully aware of the constraints in the external
environment until after the production has started. Cost reduction at this point is
much more difficult as many of the costs are designed in to the product.
PL
SA
M
(b)
(c)
It is often argued that target costing reduces the time taken to get a product to
market. Under traditional methodologies there are often lengthy delays whilst a
team goes back to the drawing board. Target costing, because it has an early
external focus, tends to help get things right first time and this reduces the time to
market.
Steps to reduce a cost gap
Review radio features
Remove features from the radio that add to cost but do not significantly add value to the
product when viewed by the customer. This should reduce cost but not the achievable selling
price. This can be referred to as value engineering or value analysis.
Team approach
Cost reduction works best when a team approach is adopted. Edward should bring together
members of the marketing, design, assembly and distribution teams to allow discussion of
methods to reduce costs. Open discussion and brainstorming are useful approaches here.
1030

Review the whole supplier chain
Each step in the supply chain should be reviewed, possibly with the aid of staff
questionnaires, to identify areas of likely cost savings. The team can then focus on areas that
are identified by staff as being likely cost saving areas. For example, the questionnaire might
ask, Are there more than five potential suppliers for this component? Clearly a yes
response to this question will mean that there is the potential for tendering or price
competition.
Components
Edward should look at the significant costs involved in components. New suppliers could be
sought or different materials could be used. Care would be needed not to damage the
perceived value of the product. Efficiency improvements should also be possible by reducing
waste or idle time that might exist. Avoid, where possible, non-standard parts in the design.
Assembly workers
PL
Productivity gains may be possible by changing working practices or by de-skilling the

process. Automation is increasingly common in assembly and manufacturing and Edward
should investigate what is possible here to reduce the costs. The learning curve may
ultimately help to close the cost gap by reducing labour costs per unit.
Clearly reducing the percentage of idle time will reduce product costs. Better management,
smoother workflow and staff incentives could all help here. Focusing on continuous
improvement in production processes may help.
Overheads
SA
M
Productivity increases would also help here by spreading fixed overheads over a greater
number of units. Equally Edward should consider an ABC approach to its overhead
allocation; this may reveal more favourable cost allocations for the digital radio or ideas for
reducing costs in the business.
Answer 5 WARGRIN I
(a)
Lifecycle costing principles
Lifecycle costing is a concept that traces all costs to a product over its complete lifecycle,
from design through to cessation. It recognises that for many products there are significant
costs to be incurred in the early stages of its lifecycle. This is probably very true for Wargrin.
The design and development of software is a long and complicated process and it is likely that
the costs involved would be very significant.
The profitability of a product can then be assessed taking all costs into consideration.
It is also likely that adopting lifecycle costing would improve decision-making and cost
control. The early development costs would have to be seen in the context of the expected
trading results, therefore preventing a serious over spend at this stage or under-pricing at the
launch point.
1031

(b)
Budgeted results for game
Sales
Variable cost (W1)
Fixed cost (W1)
Marketing cost
Profit
Year 1
$
240,000
40,000
80,000
60,000
60,000
Year 2
$
480,000
80,000
120,000
40,000
240,000
Year 3
$
120,000
20,000
80,000
20,000
Total
$
840,000
140,000
280,000
100,000
320,000
On the face of it the game will generate profits in each of its three years of life. Games only
have a short lifecycle, as the game players are likely to become bored of the game and move
on to something new.
PL
The pattern of sales follows a classic product lifecycle with poor levels of sales towards the
end of the life of the game.
The Stealth product has generated $320,000 of profit over its three-year life measured on a
traditional basis. This represents 40% of turnover ahead of its target. Indeed it shows a
positive net profit in each of its years on existence.
The contribution level is steady at around 83% indicating reasonable control and reliability of
the production processes. This figure is better than the stated target.
Considering traditional performance management concepts, Wargrin is likely to be relatively
happy with the games performance.
SA
M
However, the initial design and development costs were incurred and were significant at
$300,000 and are ignored in the annual profit calculations. Taking these into consideration,
the game only just broke even, making a small $20,000 profit. Whether this is enough is
debatable (e.g. it represents only 2.4% of sales). In order to properly assess the performance
of a product the whole lifecycle needs to be considered.
WORKINGS
(1)
Split of variable and fixed cost for Stealth
High
Low
Difference
Volume
14,000 units
10,000 units
4,000 units
Cost
$
150,000
130,000
20,000
Variable cost per unit = $20,000/4,000 unit = $5 per unit.

Total cost = fixed cost + variable cost
$150,000 = fixed cost + (14,000 $5)
$150,000 = fixed cost +$70,000
Fixed cost = $80,000 (and $120,000 if volume exceeds 15,000 units in a year).
1032

Answer 6 YAM CO I
(a)
Bottleneck process
The total processing hours of the factory is given but can be proven as follows:
18 hours 5 days 50 weeks 50 production lines = 225,000 hours.
Given this, the production capacity for pressing must be 225,000 hours/0.5 hours per metre =
450,000 metres. Using this method the production capacity for all processes is as follows:
Product B
450,000
562,500
900,000
Product C
562,500
900,000
900,000
Product A
450,000
900,000
562,500
Pressing
Stretching
Rolling
The bottleneck is clearly the pressing process, which has a lower capacity for each product.
The other processes will probably be slowed to ensure smooth processing.
PL
Clearly an alternative approach is simply to look at the original table for processing speed and
pick out the slowest process. This is pressing.
Tutorial note: Full marks would be available for explaining this observation not merely
stating it as the answer.
(b)
TPAR for each product
SA
M
Product A
Selling price
70.0
Raw materials
3.0
Throughput
67.0
Throughput per bottleneck hour* 134.0
Fixed costs per hour (W1)
90.0
TPAR
1.49
Working*
67 0.5 = 134
(1)
Product B
60.0
2.5
57.5
115.0
90.0
1.28
57.5 0.5 = 115
Product C
27.0
1.8
25.2
63.0
90.0
0.7
25.2 0.4 = 63
Fixed costs per bottleneck hour
Total fixed costs are $18,000,000 plus the labour cost. Labour costs $10 per hour for each of
the 225,000 processing hours, a cost of $2,250,000.
Total fixed cost is therefore $18,000,000 + $2,250,000 = $20,250,000
Fixed cost per bottleneck hours is $20,250,000/225,000 = $90 per hour.
Answer 7 YAM CO II
(a)
Ways in which Yam could improve the TPAR of product F

Speed up the bottleneck process. By increasing the speed of the bottleneck process the rate
of throughput will also increase, generating a greater rate of income for Yam if the extra
production can be sold. Automation might be used or a change in the detailed processes.
Investment in new machinery can also help here but the cost of that would need to be taken
into account.
Increase the selling prices. It can be difficult to increase selling prices in what is said to be a
competitive market. Volume of sales could be lost leaving Yam with unsold stock or idle
equipment. On the other hand, a price increase may be possible given that the business
appears to be selling all it can produce.
1033

Reduce the material prices. Reducing material prices will increase the net throughput rate.
Metal is available from many sources being far from a unique product. Given the industry is
mature the suppliers of the raw material could be willing to negotiate on price; this could have
volume or quality based conditions attached. Yam will have to be careful to protect its
quality levels. Bulk buying increases stock levels and the cost of that would need to be
considered.
(b)
Suggestion to cease the production of product F
Reduce the level of fixed costs. The fixed costs should be listed and targets for cost
reduction be selected. ABC techniques can help to identify the cost drivers and with
management these could be used to reduce activity levels and hence cost. Outsourcing, deskilling or using alternative suppliers (e.g. for stationery) are all possible cost reduction
methods.
PL
A TPAR of less than one indicates that the rate at which product F generates throughput (sales
revenue less material cost) is less than the rate at which Yam incurs fixed cost. So on a
simple level, producing a product that incurs fixed cost faster than it generates throughput
does not seem to make commercial sense. Clearly the TPAR could be improved (using the
methods above) before cessation is considered any further.
However, cessation decisions involve consideration of many wider issues (only three
required).
Long-term expected net cash flows from the product allowing for the timing of
those cash flows (NPV) are an important factor in cessation decisions.
Customer perception could be negative in that they will see a reduction in choice.
Lost related sales: if product C is lost will Yam lose customers that bought it along
with another product?
The use that could be made of the excess capacity that is created.
Throughput assumes that all costs except raw materials are fixed; this may not
necessarily be the case and only avoidable fixed costs need to be taken into account
for a cessation decision. If few fixed costs can be avoided then product C is making
a contribution that will be lost if the product ceased.
SA
M
Answer 8 THIN CO
(a)
Throughput accounting ratio (TPAR)
TPAR is traditionally defined as: return per factory hour/cost per factory hour. In the context
of a hospital, this will be: return per hospital hour/cost per hospital hour.
Since, in throughput accounting, all costs except material costs are treated as fixed costs, total
hospital costs will be all the salaries plus the general overheads:
$45,000 + $38,000 + $75,000 + $90,000 + $50,000 + $250,000 = $548,000.
Total hours of bottleneck resource (surgeons time) = 40 hours 47 weeks = 1,880 hours.
Therefore cost per hospital hour = $548,000/1,880 = $29149.
1034

Return per hospital hour
$
4,250
Selling price per unit

Materials cost:
injection
anaesthetic
dressings
(1,000)
(45)
(56)
3,19940
125
2,55952
$2,55952/$29149
= 878
Throughput per unit
(b)
Time on BNR in hours

Return per hour ($)
TPAR
Return per hospital hour
Optimum production plan
TAR
Ranking
Number
800
600
504
Hours
each
1
075
125
Total
hours
800
450
630
1,880
SA
M
Name
B
A
C
PL
Limiting factor analysis can be used to determine the optimum production plan. Each
procedure first needs to be ranked according to its TAR, then as many of each procedure
should be performed as possible, starting with the most profitable procedure first.
A
$
896
2
B
$
911
1
Throughput
per hour
2,65440
2,61253
2,55952
Total
throughput
2,123,520
1,175,6385
1,612,4976
4,911,6561
C
$
878
3
The optimum production plan is therefore to perform the maximum number of procedures A
and B (600 and 800 respectively) and perform only 504 of procedure C.
Total profit will be:
Throughput
Less total costs
Profit
$
4,911,6561
(548,000)
4,363,6561
1035

Answer 9 FIT CO
(a)
Life cycle cost per unit
$
160,000
800,000
3,950,000
1,940,000
240,000
360,000
2,600,000
12,400,000
1,300,000
940,000
24,690,000
PL
Total costs
R & D costs
Product design costs
Marketing costs
Fixed production costs
Fixed distribution costs
Fixed selling costs
Administration costs
Variable manufacturing costs
(100,000 $40 + 200,000 $42)
Variable distribution costs
(100,000 $4 + 200,000 $450)
Variable selling costs
(100,000 $3 + 200,000 $320)
Therefore cost per unit = $24,690,000/300,000 = $8230

Benefits of life cycle costing
The visibility of ALL costs is increased, rather than just costs relating to one period.
This facilitates better decision-making.
Individual profitability for products is more accurate because of this. This

facilitates performance appraisal and decision-making, and means that prices can be
determined with better knowledge of the true costs.
SA
M
(b)
More accurate feedback can take place when assessing whether new products are a
success or a failure, since the costs of researching, developing and designing those
products are also taken into account.
Note: Other valid benefits would also be awarded marks.
Answer 10 SNIFF CO I
Further processing decision
Production costs for 1,000 litres of the standard perfume
Aromatic oils
Diluted alcohol
$
10 litres $18,000/litre
990 litres $20/litre
Material cost
Labour
2,000 hours $15
Total
Cost per litre
Sales price per litre
Lost contribution per hour of labour used on new products
1036
180,000
19,800
199,800
30,000
229,800
22980
39980
($399,800 $199,800) 2,000 hours = $100 per hour.

Incremental costs
Hormone
Supervisor
Labour
Fixed cost
Market research
Total
$
2 litre $7,750/litre 15,500
Sunk cost
0
500 hours $100/hour 50,000
Sunk cost
0
Sunk cost
0
65,500
Incremental revenues
8 litre $12,000/litre
Sunk cost
700 hours $100/hour
Sunk cost
Sunk cost
$
96,000
0
70,000
0
0
166,000
Female version
$
Standard
200 litre $399.80/litre 79,960 800 litre $399.80
Hormone added 202 litre $750/litre 151,500 808 litre $595/litre
Incremental revenue
71,540
Net benefit/(cost)
6,040
$
319,840
480,760
160,920
(5,080)
PL
Male version
Female version
Male version
SA
M
The Male version of the product is worth further processing in that the extra revenue exceeds
the extra cost by $6,040.
The Female version of the product is not worth further processing in that the extra cost
exceeds the extra revenue by $5,080.
In both cases the numbers appear small. Indeed, the benefit of $6,040 may not be enough to
persuade management to take the risk of damaging the brand and the reputation of the
business. To put this figure into context: the normal output generates a contribution of $170
per litre and on normal output of about 10,000 litres this represents a monthly contribution of
around $1.7m (after allowing for labour costs).
Future production decisions are a different matter. If the product proves popular, however,
Sniff might expect a significant increase in overall volumes. If Sniff could exploit this and
resolve its current shortage of labour then more contribution could be created. It is worth
noting that resolving its labour shortage would substantially reduce the labour cost allocated
to the hormone added project. Equally, the prices charged for a one off experimental
promotion might be different to the prices that can be secured in the long run.
1037
Specimen Exam applicable from

December 2014
Time allowed
Reading and planning:
Writing:
Paper F5
Performance
Management
PL
E
Fundamentals Level Skills Module
15 minutes
3 hours
SA
This paper is divided into two sections:
Section A ALL TWENTY questions are compulsory and MUST be

attempted
Section B ALL FIVE questions are compulsory and MUST be
attempted
Formulae Sheet is on page 12.
Do NOT open this paper until instructed by the supervisor.

During reading and planning time only the question paper may
be annotated. You must NOT write in your answer booklet until
instructed by the supervisor.
This question paper must not be removed from the examination hall.
The Association of Chartered Certified Accountants
Section A ALL TWENTY questions are compulsory and MUST be attempted

Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to
each multiple choice question.
Each question is worth 2 marks.
1
The following statements have been made about different types of standards in standard costing systems:
(1) Basic standards provide the best basis for budgeting because they represent an achievable level of productivity.
(2) Ideal standards are short-term targets and useful for day-to-day control purposes.
A
B
C
D
1 only
2 only
Neither 1 nor 2
Both 1 and 2
PL
E
The following statements have been made about management information systems:
(1) They are designed to report on existing operations
(2) They have an external focus
1 only
2 only
Neither 1 nor 2
Both 1 and 2
A
B
C
D
The following statements have been made about zero based budgeting:
(1) Employees will focus on eliminating wasteful expenditure
(2) Short-term benefits could be emphasised over long-term benefits
1 only
2 only
Neither 1 nor 2
Both 1 and 2
SA
A
B
C
D
The following statements have been made about changing budgetary systems:
(1) The costs of implementation may outweigh the benefits
(2) Employees will always welcome any new system which improves planning and control within the organisation
A
B
C
D
1 only
2 only
Neither 1 nor 2
Both 1 and 2
Tech World is a company which manufactures mobile phone handsets. From its past experiences, Tech World has
realised that whenever a new design engineer is employed, there is a learning curve with a 75% learning rate which
exists for the first 15 jobs.
A new design engineer has just completed his first job in five hours.
Note: At the learning rate of 75%, the learning factor (b) is equal to 0415.
How long would it take the design engineer to complete the sixth job?
2377 hours
1442 hours
2564 hours
5 hours
PL
E
A
B
C
D
The following are types of management accounting techniques:

(i)
(ii)
(iii)
(iv)
Flow cost accounting

Input/output analysis
Life-cycle costing
Which of the above techniques could be used by a company to account for its environmental costs?
A
B
C
D
A company makes a single product which it sells for $2 per unit.
(i) only
(i) and (ii) only
(i), (ii) and (iii) only
All of the above
Fixed costs are $13,000 per month.

The contribution/sales ratio is 40%.
Sales revenue is $62,500.
What is the margin of safety (in units)?

15,000
16,250
30,000
31,250
SA
A
B
C
D
The following statements have been made about the balanced scorecard:
(1) It focuses solely on non-financial performance measures
(2) It looks at both internal and external matters concerning the organisation
A
B
C
D
1 only
2 only
Neither 1 nor 2
Both 1 and 2
[P.T.O.
SA
PL
E
Answers
Fundamentals Level Skills Module, Paper F5

Performance Management
Specimen Exam Answers
PL
E
Section A
Y = axb
Average time for six jobs: 5 x 60415 = 2377 hours
Total time required for six jobs = 6 x 2377 hours = 14262 hours
Average time for five jobs: 5 x 50415 = 2564 hours
Total time required for five jobs = 5 x 2564 hours = 12820 hours
Time required to perform the 6th job = Total time required for six jobs total time required for five jobs.
Therefore, time required to perform the 6th job = 14262 hours 12820 hours = 1442 hours
Sales = $62,500
Break even sales = $13,000/04 = $32,500
Margin of safety (sales revenue) = $30,000
Margin of safety (units) $30,000/$2 =15,000 units.
SA
Return per factory hour = ($130 $50)/4 hours = $20

Factory costs per hour = $20 + $40/4 = $15
TAR = $20/$15 = 133
10 B
11 C
12 A
13 C
Contribution for X = $15 ($60 $45)

Contribution for Y = $12 ($25 $13)
Objective function = 15x + 12y
Constraints:
Material = 3x + y 4,200 (as X uses 3 kgs of material (15/5), Y uses 1 kg (5/5))
Labour = 4x + 05y 3,000 (as X uses 4 labour hrs (24/6), Y uses 05 hrs (3/6))
15
E
PL
ABOUT BECKER PROFESSIONAL EDUCATION

Together with ATC International, Becker Professional Education
provides a single destination for candidates and professionals
looking to advance their careers and achieve success in:
Accounting
International Financial Reporting
Project Management
Continuing Professional Education
Healthcare
SA
For more information on how Becker Professional Education can

support you in your career, visit www.becker.com.
The most recent ACCA examinations with suggested answers
t
Past examination questions, updated where relevant
t
Model answers and suggested solutions
t
Tutorial notes
SA
M
PL
t
This ACCA Revision Question Bank has been reviewed

by ACCA's examining team and includes:
www.becker.com/ACCA | acca@becker.com
2014 DeVry/Becker Educational Development Corp. All rights reserved.

F5PM Revision Question Bank - Sample - D14 J15 PDF

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

F5PM Revision Question Bank - Sample - D14 J15 PDF

Enviado por

Direitos autorais:

Formatos disponíveis

PL

December 2014June 2015 Edition

REVISION QUESTION BANK

Paper F5 | PERFORMANCE MANAGEMENT

ATC International became a part of Becker

*Platinum Moscow, Russia and Kiev, Ukraine. Gold Almaty, Kazakhstan

Becker Professional Education's ACCA Study Materials

REVISION QUESTION BANK

For Examinations to June 2015

Copyright 2014 DeVry/Becker Educational Development Corp. All rights reserved.

REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

MULTIPLE CHOICE QUESTIONS

Abkaber Co (ACCA D02)

DEVELOPMENTS IN MANAGEMENT ACCOUNTING

Environmental management accounting

PERFORMANCE MANAGEMENT (F5) REVISION QUESTION BANK

RELEVANT COST ANALYSIS

Sniff Co (ACCA D07)

LIMITING FACTOR DECISIONS

RISK AND UNCERTAINTY

COST VOLUME PROFIT ANALYSIS

QUANTITATIVE TECHNIQUES FOR BUDGETING

BUDGETING AND STANDARD COSTING

Wargrin II (ACCA D08)

BASIC VARIANCE ANALYSIS

Chaff Co I (ACCA J08)

REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

ADVANCED VARIANCE ANALYSIS

PLANNING AND OPERATIONAL VARIANCES

Spike Co I (ACCA D07)

Oliver (ACCA J09)

FURTHER ASPECTS OF PERFORMANCE MANAGEMENT

DIVISIONAL PERFORMANCE EVALUATION

Business Solutions (ACCA J02)

PERFORMANCE MANAGEMENT INFORMATION SYSTEMS

PERFORMANCE MANAGEMENT (F5) REVISION QUESTION BANK

SPECIMEN EXAM (applicable from December 2014)

20 Multiple Choice Questions

REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

PERFORMANCE MANAGEMENT (F5) REVISION QUESTION BANK

REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

The budgeted annual costs for two activities are as follows:

What is the budgeted machine set-up cost per unit of Product S?

PERFORMANCE MANAGEMENT (F5) REVISION QUESTION BANK

It is not particularly relevant for service industry businesses.

Which of the following statements about activity-based costing is/are true?

Purchase order processing costs

ABC eliminates the use of volume as a means of measuring costs.

Which statements are true/false?

REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

Introducing ABC will always reduce costs in the short term.

Which of the statements is/are correct?

Total distribution costs

To the nearest $, what is the distribution cost for this customer?

DEVELOPMENTS IN MANAGEMENT ACCOUNTING

What is the throughput contribution per hour for Product C?

PERFORMANCE MANAGEMENT (F5) REVISION QUESTION BANK

Demand per period (units)

Planning and concept design costs.

All four costs

REVISION QUESTION BANK PERFORMANCE MANAGEMENT (F5)

Fixed costs to produce 200,000 units are estimated to be $680,000.