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Target costing / Lifecycle costing / Environmental Management Accounting (short written part)
Multi-product cost volume profit analysis
Budgetting (written part) / Time series / regression analysis
Planning and Operational variances
Performance measurement – financial and non-financial / Transfer pricing
BPP
Specialist Cost and Management Accounting Techniques: Environmental accounting techniques have not yet been tested under the new syllabus, so could feature. Throughput accounting featured numerically in June. ABC vs AC or target costing is also possible.
Decision making techniques: There is a trend for pricing to be examined with other areas of the syllabus, for example learning curves. Relevant costing, CVP, make or buy or other short term decisions could feature as dealing with risk and uncertainty and limiting factors have featured recently.
Budgeting: Discussion marks often focus on the appropriateness of budgeting types or the behavioural impacts of types of budgeting. Numerically it could be tested via time series as a forecasting method.
Standard costing & variance analysis: Variances are likely to feature in the exam, students should be prepared for mix and yield variances, planning and operational variances as well as the basic variances and operating statements. Questions typically require thought about the most appropriate layout and could include discussion of variances which have already been calculated.
Performance Measurement and Control: In June, there was a change in emphasis, with this being the first paper not to contain a question focusing on interpretation of performance and financial vs. non financial measures. Detailed knowledge could instead be required on any of the performance measurement tools. Transfer pricing has not been examined recently, so could feature.
Kaplan tips
Performance Management
•Payoff tables
•Multiproduct breakeven
•ABC
•Linear programming
First Intuition
Target costing
Life cycle costing
Relevant costing decision making
Forecasting
Fixed overhead variances
Financial and non-financial performance assessment
Transfer pricing
Icount
Linear Programming
Analysing Performance using Financial and Non Financial Indicators
Activity Based Costing
Relevant Costing
Budgeting
ATC
The examiner has warned candidates against relying on tips, and the dangers of question spotting were highlighted in the December 2010 exam, when two topics that had appeared in the June 2010 exam appeared again in December. The examiner said that the linear programming question had been done well in June 2010. It was done badly in December 2010. Many candidates had clearly assumed that since the topic was examined in June, it would not come up in December. They were wrong. Please don’t rely on any tips therefore.
Exam Tips
Rather than tipping specific topics therefore, I would just like to give some general advice. The big difference between F2 and F5 is that at F5 candidates are expected to be able to understand, and discuss the calculations they are performing, rather than just doing them, as in F2. So please make sure you are aware of the purpose of all the management accounting techniques.
Secondly, F5 requires a certain amount of interpretation. Many variance analysis questions, for example, require candidates to explain what the variance is actually showing management. The examiner has stated that many candidates are not good at this. There are many past exam questions that feature this type of skill- a good one is the question Chaff co from the June 2008 exam. Practice these types of question and review the examiner’s solution.
Finally, don’t get bogged down by the many different types of variance in your study texts. The most important variances are the “basic” variances, Materials Mix and Yield Variances, Sales mix and quantity variances and planning variances. The other variances, such as activity based are not likely to feature for a large number of marks in any exam. Your effort is better spent improving your interpretation skills than on trying to cover all the other advanced variances.
Exam Technique
Provide some short basic exam technique information for your particular paper (this can be copied and pasted from last year’s).
EXP
Advance budgeting techniques: Possibly target costing and /or lifecycle costing
Decision making techniques: CVPis a big possibility along with a “one-off” relevant costing question
Variance analysis: A mix of numbers +interpretation. Interpretation may revolve around manager performance appraisal
Budgeting: Possibly an entirely written question. If numbers are asked, learning curve is possible
Performance management:A key area, almost certain to be asked. As always, a mix of financial and non-financial factors should be considered. Make sure you are confident in this area.
Target costing / Lifecycle costing / Environmental Management Accounting (short written part)
Multi-product cost volume profit analysis
Budgetting (written part) / Time series / regression analysis
Planning and Operational variances
Performance measurement – financial and non-financial / Transfer pricing
BPP
Specialist Cost and Management Accounting Techniques: Environmental accounting techniques have not yet been tested under the new syllabus, so could feature. Throughput accounting featured numerically in June. ABC vs AC or target costing is also possible.
Decision making techniques: There is a trend for pricing to be examined with other areas of the syllabus, for example learning curves. Relevant costing, CVP, make or buy or other short term decisions could feature as dealing with risk and uncertainty and limiting factors have featured recently.
Budgeting: Discussion marks often focus on the appropriateness of budgeting types or the behavioural impacts of types of budgeting. Numerically it could be tested via time series as a forecasting method.
Standard costing & variance analysis: Variances are likely to feature in the exam, students should be prepared for mix and yield variances, planning and operational variances as well as the basic variances and operating statements. Questions typically require thought about the most appropriate layout and could include discussion of variances which have already been calculated.
Performance Measurement and Control: In June, there was a change in emphasis, with this being the first paper not to contain a question focusing on interpretation of performance and financial vs. non financial measures. Detailed knowledge could instead be required on any of the performance measurement tools. Transfer pricing has not been examined recently, so could feature.
Kaplan tips
Performance Management
•Payoff tables
•Multiproduct breakeven
•ABC
•Linear programming
First Intuition
Target costing
Life cycle costing
Relevant costing decision making
Forecasting
Fixed overhead variances
Financial and non-financial performance assessment
Transfer pricing
Icount
Linear Programming
Analysing Performance using Financial and Non Financial Indicators
Activity Based Costing
Relevant Costing
Budgeting
ATC
The examiner has warned candidates against relying on tips, and the dangers of question spotting were highlighted in the December 2010 exam, when two topics that had appeared in the June 2010 exam appeared again in December. The examiner said that the linear programming question had been done well in June 2010. It was done badly in December 2010. Many candidates had clearly assumed that since the topic was examined in June, it would not come up in December. They were wrong. Please don’t rely on any tips therefore.
Exam Tips
Rather than tipping specific topics therefore, I would just like to give some general advice. The big difference between F2 and F5 is that at F5 candidates are expected to be able to understand, and discuss the calculations they are performing, rather than just doing them, as in F2. So please make sure you are aware of the purpose of all the management accounting techniques.
Secondly, F5 requires a certain amount of interpretation. Many variance analysis questions, for example, require candidates to explain what the variance is actually showing management. The examiner has stated that many candidates are not good at this. There are many past exam questions that feature this type of skill- a good one is the question Chaff co from the June 2008 exam. Practice these types of question and review the examiner’s solution.
Finally, don’t get bogged down by the many different types of variance in your study texts. The most important variances are the “basic” variances, Materials Mix and Yield Variances, Sales mix and quantity variances and planning variances. The other variances, such as activity based are not likely to feature for a large number of marks in any exam. Your effort is better spent improving your interpretation skills than on trying to cover all the other advanced variances.
Exam Technique
Provide some short basic exam technique information for your particular paper (this can be copied and pasted from last year’s).
EXP
Advance budgeting techniques: Possibly target costing and /or lifecycle costing
Decision making techniques: CVPis a big possibility along with a “one-off” relevant costing question
Variance analysis: A mix of numbers +interpretation. Interpretation may revolve around manager performance appraisal
Budgeting: Possibly an entirely written question. If numbers are asked, learning curve is possible
Performance management:A key area, almost certain to be asked. As always, a mix of financial and non-financial factors should be considered. Make sure you are confident in this area.
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