ACCA PM (Performance Management)
Notes, Practice, Mock Exam & Guides
ACCA PM (Performance Management, was F5) is one of papers in Applied Skills Module. The syllabus states its aim is to develop knowledge and skills in the application of management accounting techniques of quantitative and qualitative information for planning, decision-making, performance evaluation and control.
ACCA Performance Management (PM, was F5) pass rates are relatively lower than other papers in same module. PM pass rates are ranged from 37% to 44% in the past five sessions.
There is a minor change in the syllabus between September 2020 to June 2021 and September 2021 to June 2022. Past paper questions seen in last year are still very good in preparing the exam.
In examiner’s report, it highlights some areas that many students performance can be improved such as calculation of division’s return on investment, limitations of using externally generated information, performance measurement and cost-volume-profit (CVP) analysis.
It is important to stress that the knowledge and skills in Performance Management are partly from Management Accounting. The areas such as costing techniques, overhead treatments types of budgets and variances analysis.
On top of these fundamental knowledge and skills, you are required to understand the decision-making tools and how to apply those tools. In addition, performance management systems, measurement and control is another key area in the syllabus. This area leads directly to Advanced Performance Management (APM).
Tuition and revision videos
Study and revision notes
Mock exam with feedback
All questions are compulsory. The 3-hour (see below) exam will assess all parts of the syllabus and will test knowledge and some comprehensive or application of this knowledge.
For computer-based exam (CBE), an extra 20 minutes is given to you to reflect the need to complete seeded questions in exam. In other words, total exam time for CBE is 3 hours and 20 minutes.
For paper-based exams, an extra 15 minutes is given to you to reflect the manual effort required as compared to the time needed for CBE. Total exam time is therefore 3 hours and 15 minutes.
Section A includes 15 two-mark objective test questions covering all areas in the syllabus.
Section B comprises 3 ten-mark questions each containing five objective test questions.
Section C comprises two 20 marks constructed response questions. The questions will come from decision making techniques, budgeting and control, performance measurement and control areas of the syllabus.
For CBE, seeded questions may be seen in either Section A or Section B.
To know more about Computer-based Examination (CBE), please click HERE.
ACCA PM (was F5) is one of the Applied Skills Level papers in your ACCA professional qualification journey.
The syllabus begins by focusing on the information needs, technologies and systems required by organisations to manage and measure performance in the modern, competitive environment.
It then moves to specialised costing and management accounting topics which some knowledge assumed from Management Accounting (MA), mainly overhead treatments.
The syllabus also considers decision-making in which you are expected to appreciate problems surrounding scarce resource, pricing and make-or-buy decisions, and how this relates to the assessment of performance.
The most important aspect of many accountant's lives is budgeting. PM requires you to demostrate the knowledge on different budgeting techniques and the problems inherent in them. Some budgeting techniques such as fixed, flexible and incremental budgets is assumed from MA.
Standard costing and variances are then built on. You are familiar with different types of budgeting, standard costing and variances analysis from your Management Accounting paper. But now, you need to do more by showing your performance analysis techniques.
The final part is performance measurement and control. Both financial and non-financial performance measurements are required as these are the cornerstone for Advanced Performance Management.
There are 5 sections in the syllabus, which are –
A Information, technology and systems for organisational performance
Identify and discuss the information, systems and developments in technology required for organisations to manage and measure performance.
B Specialist cost and management accounting techniques
Explain and apply cost accounting techniques
C Decision-making techniques
Select and appropriately apply decision-making techniques to facilitate business decisions and promote efficient and effective use of scarce business resources, appreciating the risks and uncertainty inherent in business and controlling those risks
D Budgeting and control
Identify and apply appropriate budgeting techniques and methods for planning and control and use standard costing systems to measure and control business performance and to identify remedial action
E Performance measurement and control
Assess the performance of an organisation from both a financial and non-financial viewpoint, appreciating the problems of controlling divisionalised businesses and the importance of allowing for external aspects
In the exam, you will see questions from every section in the summary above. There is no one area you can ignore as all of them will be in your exam. Perhaps you find the topics above are separated, however, they are linked together in real business world as well as the syllabus design.
The general principle in ACCA Performance Management Paper exam is 1 mark per 1.8 minute which means you have 100 marks to complete an exam within 180 minutes.
It is observed that many good attempts in Section A and Section B but not in Section C. You should be careful that the time spent on Section C questions of the exam. Examiners suggest you should allocate 72 minutes (or 40%), the minimum, of your total time in attempting Section C. It is probably more than what you need to work on objective test questions.
It is wise for you to practice mock exam to train your time management skills before you need to attempt the paper.
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ACCA Performance Management pass rates are stable which is around 40%. How to study it to pass in exam is one of the questions asked frequently by students.
From Examiner’s report, it seems Section C performance is critical to pass the exam while both Section A and Section B performance are quite stable.
Similar to other Skills Module papers, ACCA PM has 3 sections while Section A is objective test questions, Section B is case based objective test questions and Section C is constructed response questions.
The following areas are considered challenging in Section A to a lot of students, they are –
Calculation of a division’s return on investment;
Limitations of using externally generated information.
In Section B, it tests your knowledge on a number of topics in more detail than Section A.
It covers the whole syllabus and you need to read the case scenario and requirements very careful while the following topics are often seen in Section B –
Decision making under uncertainty
Activity based costing
For Section C, only selected areas are examined and we observed the areas below are examined in recent attempts –
Performance measurement and discussion of business performance
CVP analysis e.g. Breakeven Revenue
Limiting factor analysis.
Last but not the least, Examiner always stresses you to pick “easy marks” first. We all know that it is very rare to have “full marks” in an exam. It is a test of you on how to allocate the limited resources, i.e. time, to get the maximum marks available. Sticking into the questions you are not familiar with is probably losing time to pick those “easy marks”.
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