PL
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For Examinations to2014
August
2015
Edition
REVISION QUESTION BANK
SA
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ACCA
Paper F2 | MANAGEMENT ACCOUNTING
Foundations in Accountancy
Paper FMA | MANAGEMENT ACCOUNTING
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ACCA
PAPER F2/FMA
SA
M
MANAGEMENT ACCOUNTING
REVISION QUESTION BANK
For Examinations to August 2015
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REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
CONTENTS
Question
Page
Formulae Sheet
Present Value Table
Annuity Table
Answer Marks
Date worked
(vii)
(viii)
(ix)
ACCOUNTING FOR MANAGEMENT
MCQs Accounting for Management
SOURCES OF DATA
Sources
Economic environment
MCQs Sampling techniques
COST CLASSIFICATION
5
6
7
8
1001
34
4
5
5
1002
1003
1003
10
6
10
PL
2
3
4
1
E
1
Total costs
Avoidable
Archibald (ACCA J05)
MCQs Cost Classification
6
6
7
8
1004
1004
1005
1006
3
8
10
34
14
1007
12
15
16
16
17
17
18
1007
1008
1008
1009
1010
1010
10
10
10
9
9
14
19
21
21
22
22
1011
1012
1013
1014
1016
20
14
12
20
12
24
25
25
26
27
28
1016
1017
1018
1019
1020
1020
8
12
10
10
8
16
PRESENTING INFORMATION
9
MCQs Presenting information
SA
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ACCOUNTING FOR MATERIALS
10
11
12
13
14
15
Wivelsfield
EOQ (ACCA D03)
Goodheart hospital (ACCA D04)
Jane (ACCA J05)
Point (ACCA D06)
MCQs Materials
ACCOUNTING FOR LABOUR
16
17
18
19
20
7½ hour day (ACCA)
Gross wages (ACCA)
Labour turnover (ACCA)
Idle (ACCA J01)
MCQs Labour
ACCOUNTING FOR OVERHEADS
21
22
23
24
25
26
Shark
One service cost centre (ACCA J00)
Warninglid
Reciprocal method (ACCA D03)
Phoebe (ACCA D06)
MCQs Overheads
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
(iii)
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
CONTENTS
Question
Page
Answer Marks
Date worked
ABSORPTION AND MARGINAL COSTING
27
28
29
30
Surat (ACCA D01)
Oathall (ACCA D02)
Mollepata
MCQs Absorption and Marginal Costing
30
31
32
33
1021
1023
1024
1025
13
10
20
14
Specific order and job costing (ACCA)
Job Yippee (ACCA)
Solicitors (ACCA)
Job costing system (ACCA D00)
Service costing (ACCA)
Transport business (ACCA)
MCQs Job, Batch and Service Costing
PROCESS COSTING
Duddon (ACCA J04)
Weighted average method
Partlett (ACCA D05)
Maybud (ACCA D04)
Joint and by-products (ACCA J03)
Joint and By (ACCA)
Saphir (ACCA)
Corcoran (ACCA J06)
Luiz (ACCA J07)
MCQs Process Costing
SA
M
38
39
40
41
42
43
44
45
46
47
34
35
36
36
37
38
38
1026
1027
1028
1030
1031
1032
1034
10
16
14
20
12
17
24
41
42
42
43
43
44
45
45
46
47
1035
1036
1037
1038
1039
1040
1042
1043
1044
1045
10
12
12
10
10
14
10
12
12
16
49
50
50
50
50
1046
1047
1047
1048
1049
8
7
15
10
8
PL
31
32
33
34
35
36
37
E
JOB, BATCH AND SERVICE COSTING
ALTERNATIVE COSTING PRINCIPLES
48
49
50
51
52
Birtles (ACCA D04)
Hughes (ACCA J05)
Product life cycle (ACCA J06)
Activity based costing system (ACCA J07)
MCQs Alternative costing principles
BUDGETING – NATURE, PURPOSE AND BEHAVIOURAL ASPECTS
53
54
55
(iv)
Planning and control (ACCA D04)
Top down and bottom up (ACCA D04)
MCQs Nature, purpose and
behavioural aspects
51
51
1049
1050
8
8
52
1051
18
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
CONTENTS
Question
Page
Answer Marks
Date worked
STATISTICAL TECHNIQUES
Absent worker
Cost inflation
Product X
Personal disposable income
South
Advertising expenditure (ACCA D02)
Case (ACCA J05)
Computer spreadsheet package (ACCA D05)
Josephine (ACCA J06)
MCQs Statistical techniques
66
67
68
69
70
1051
1054
1055
1055
1057
1058
1059
1061
1061
1062
25
12
11
16
10
10
20
6
10
40
PL
BUDGET PREPARATION
54
54
55
55
56
56
57
57
58
58
E
56
57
58
59
60
61
62
63
64
65
D&M
Winners
Wollongong (ACCA D01)
Langdale (ACCA J04)
MCQs Budget preparation
64
65
66
66
67
1063
1065
1067
1068
1069
20
23
10
10
34
FLEXIBLE BUDGETS, BUDGETARY CONTROL AND REPORTING
Bendy
Francis (ACCA D04)
Kilkline Hospital (ACCA D05)
MCQs Flexible budgets, control and reporting
SA
M
71
72
73
74
72
73
74
75
1071
1073
1074
1076
20
20
18
28
78
78
79
79
80
80
81
81
82
83
84
85
1076
1078
1079
1080
1081
1082
1083
1084
1085
1086
1088
1088
20
10
10
10
10
10
11
12
10
20
12
50
STANDARD COSTING AND VARIANCE ANALYSIS
75
76
77
78
79
80
81
82
83
84
85
86
Material A (ACCA D92)
Newcastle (ACCA D01)
Fixed overheads (ACCA J03)
Murgatroyd (ACCA J05)
Costing differences (ACCA J05)
Deadeye (ACCA J06)
Fairfax (ACCA D06)
Casilda (ACCA J07)
Flexed (ACCA D03)
Perseus (ACCA J94)
MCQs Standard costing systems
MCQs Variance analysis
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
(v)
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
CONTENTS
Question
Page
Answer Marks
Date worked
CAPITAL BUDGETING AND DISCOUNTED CASH FLOWS
Carter
ABC
Investment project
Product launch
Project investment
Barcombe
Martinique
Ljubicic
Warkel & Co
MCQs Capital budgeting and DCFs
Rockingham Hospital
Osborne
CP Division
Value analysis
Cost reduction and cost control
Perry (ACCA J04)
Heighway (ACCA J05)
Balanced scorecard (ACCA D05)
Mabbutt (ACCA D05)
Lewisville (ACCA J06)
Benchmarking (ACCA J07)
MCQs Performance measurement
SA
M
97
98
99
100
101
102
103
104
105
106
107
108
1090
1092
1093
1094
1095
1095
1096
1097
1098
1099
13
20
9
7
12
10
10
10
23
20
PL
PERFORMANCE MEASUREMENT
90
91
92
92
93
93
94
94
95
95
E
87
88
89
90
91
92
93
94
95
96
98
99
101
101
101
101
102
104
104
104
106
106
1100
1102
1104
1104
1105
1106
1107
1109
1110
1110
1112
1113
20
10
8
9
8
20
20
14
6
20
10
40
ACCA PILOT PAPER (2 hours)
Section A
Section B
(vi)
MCQs
Three compulVory questions
70
30
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REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
MCQs 1 ACCOUNTING FOR MANAGEMENT
Monthly variance reports are an example of which one of the following types of
management information?
A
B
C
D
(i)
(ii)
(iii)
Strategic information is mainly used by senior management in an organisation.
Productivity measurements are examples of tactical information.
Operational information is required frequently by its main users.
A
B
C
D
(i) and (ii) only
(i) and (iii) only
(ii) and (iii) only
(i), (ii) and (iii)
The following statements relate to financial accounting or to cost and management
accounting:
(i)
The main users of financial accounting information are external to an organisation.
(ii)
Cost accounting is part of financial accounting and establishes costs incurred by an
organisation.
(iii)
Management accounting is used to aid planning, control and decision making.
SA
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1.3
Which of the following statements are correct?
E
1.2
Tactical
Strategic
Planning
Operational
PL
1.1
Which of the statements are correct?
A
B
C
D
1.4
Which of the following is an initial requirement of a management control system?
A
B
C
D
1.5
(i) and (ii) only
(i) and (iii) only
(ii) and (iii) only
(i), (ii) and (iii)
Establishing the standard to be achieved
Measuring the actual performance
Setting organisational objectives
Taking appropriate corrective action
The following statements refer to strategic planning:
(i)
(ii)
(iii)
It is concerned with quantifiable and qualitative matters.
It is mainly undertaken by middle management in an organisation.
It is concerned predominantly with the long term.
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 1
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
Which of the statements are correct?
A
B
C
D
A
B
C
D
1.7
Control accounts
Cost classification
Cost unit
Periodic stocktaking
E
Which one of the following is a common feature of cost accounting but not financial
accounting?
Consider the following incomplete statements relating to management information:
(1)
(2)
(3)
(4)
clear to the user
detailed and completely accurate
provided whatever the cost
relevant for purpose.
PL
1.6
(i) and (ii) only
(i) and (iii) only
(ii) and (iii) only
(i), (ii) and (iii)
Which of the above are necessary features of useful management information?
A
B
C
D
What is the purpose of management information?
SA
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1.8
1 and 2 only
1 and 4 only
2 and 4 only
1, 2 and 3 only
A
B
C
D
1.9
Which of the following only contains essential features of useful management
information?
A
B
C
D
1.10
Accurate, clear, presented in report format
Timely, reliable, supported by calculations
Regular, complete, communicated in writing
Clear, accurate, relevant for its purpose
Which of the following describes the control process?
A
B
C
D
2
Planning only
Planning and control only
Planning, control and decision-making only
Planning, control, decision-making and research and development
The action of monitoring something to keep it on course
The choice between alternatives
The development of strategies to achieve objectives
The establishment of a plan for a future period
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
1.11
Consider the following statements in relation to management information:
(1)
It should always be provided regardless of its cost
(2)
It is data that has been processed in such a way as to be meaningful to the person
who receives it
(3)
It should not be provided until it is as detailed and accurate as possible
A
B
C
D
(1)
(2)
(3)
(4)
Non-financial as well as financial
Used by all stakeholders
Concerned with cost control only
Not legally required
A
B
C
D
1 and 4 only
2 and 3 only
1, 2 and 3 only
2, 3 and 4 only
Which of the following statements about cost and management accounting are true?
SA
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1.13
Which of the following are characteristics of management accounting information?
PL
1.12
1 only
2 only
1 and 3 only
2 and 3 only
E
Which of the above statements is/are true of good management information?
1.14
(1)
Cost accounting cannot be used to provide inventory valuations for external
financial reporting
(2)
There is a legal requirement to prepare management accounts
(3)
The format of management accounts may vary from one business to another
(4)
Management accounting provides information to help management make business
decisions
A
B
C
D
1 and 2 only
1 and 4 only
2 and 3 only
3 and 4 only
Which of the following are characteristics of management accounting information?
(1)
(2)
(3)
(4)
Forward looking
Legally required
Concerned with cost control
Follows clearly defined standards
A
B
C
D
1 and 3 only
2 and 4 only
1, 3 and 4 only
1, 2 and 3 only
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MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
1.15
Consider the following incomplete statements relating to features of management
information:
(1)
(2)
(3)
(4)
Communicated in writing
Presented in report format
Supported by calculations
Timely and clear to the user
A
B
C
D
1.16
4 only
2 and 3 only
1 and 4 only
1, 2 and 3 only
E
Which of the above are necessary features of useful management information?
Consider the following statements relating to management information:
PL
Statement 1: Management information should have some value otherwise it would not be
worth the cost of collecting and communicating it
Statement 2: Management information only needs to be accurate enough for its purpose
Are the statements TRUE or FALSE?
A
B
C
D
Statement 2
True
False
True
False
Which of the following statements concerning management information is/are correct?
SA
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1.17
Statement 1
True
True
False
False
(1)
A user of management information should have all the information he needs to do
his job properly
(2)
A management information report must be relevant for a variety of purposes
(3)
A management information report should contain a lot of detail to ensure complete
accuracy
A
B
C
D
1 only
1 and 2 only
2 and 3 only
3 only
(34 marks)
Question 2 SOURCES
(a)
Briefly distinguish between primary and secondary sources of data.
(2 marks)
(b)
Describe internal and external sources of information, giving THREE examples of each.
(8 marks)
(10 marks)
4
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
Question 3 ECONOMIC ENVIRONMENT
(a)
State FOUR factors which impact the general economic environment.
(2 marks)
(b)
Describe how changes in economic factors affect costs and revenues.
(4 marks)
(6 marks)
MCQs 4 SAMPLING TECHNIQUES
Which sampling method selects items from identifiable sub-populations?
Which of the following selection methods provide a sample which is representative of a
population?
(1)
(2)
(3)
(4)
Cluster
Multi-stage
Quota sampling
Simple random
A
B
C
D
1 and 3 only
1 and 4 only
2 and 3 only
2 and 4 only
SA
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4.2
Cluster
Multi-stage
Simple random
Stratified
E
A
B
C
D
PL
4.1
4.3
4.4
Which of the following is an example of a cluster sample?
A
Selecting every 20th entry in a membership listing
B
Taking the name of every company listed in a business telephone directory
C
Selecting every entry in a telephone directory with the same postal or zip code
D
Generating a list of numbers by random numbers and matching them to entries in a
trade directory
A publishing company is conducting research into the nation’s reading habits. It randomly
selects a number of locations from around the country and then interviews everyone who lives
in these locations.
What is this approach to sampling known as?
A
B
C
D
Cluster sampling
Quota sampling
Stratified sampling
Systematic sampling
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 5
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
4.5
The following statements relate to stratified random sampling:
(1)
Every item in the population has an equal chance of being selected.
(2)
The sample proportionately represents items in different sub-populations.
(3)
The sample is more representative of the target populations than the accessible
population.
A
B
C
D
1 only
2 only
3 only
None of them
E
Which of the statements, if any, is true?
(10 marks)
Question 5 TOTAL COSTS
SA
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Output
(units)
11,500
12,000
12,500
13,000
13,500
14,000
PL
The total costs incurred at various output levels, for a process operation in a factory, have been
measured as follows:
Total cost
$
102,476
104,730
106,263
108,021
110,727
113,201
Required:
Using the high-low method, analyse the costs of the process operation into fixed and variable
components.
(3 marks)
Question 6 AVOIDABLE
Distinguish between, and provide an illustration of:
(a)
“avoidable” and “unavoidable” costs;
(4 marks)
(b)
“cost centres” and “cost units”.
(4 marks)
6
(8 marks)
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REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
Question 7 ARCHIBALD
Archibald manufactures and sells one product. Its budgeted income statement for the first month of
trading is as follows:
$
Sales (1,200 units at $180 a unit)
Less: Cost of sales:
Production (1,800 units at $100 a unit)
180,000
Less Closing inventory (600 units at $100 a unit) (60,000)
————
$
216,000
E
(120,000)
————
96,000
(41,000)
————
55,000
————
Gross profit
Less Fixed selling and distribution costs
PL
Net profit
The budget was prepared using absorption costing principles. If budgeted production in the first month
had been 2,000 units then the total production cost would have been $188,000.
Required:
(a)
Using the high-low method, calculate:
(i)
(ii)
(i)
(ii)
(c)
(4 marks)
If the budget for the first month of trading had been prepared using marginal costing
principles, calculate:
SA
M
(b)
the variable production cost for a unit; and
the total monthly fixed production cost.
the total contribution; and
the net profit.
(4 marks)
Explain clearly the circumstances in which the monthly profit or loss would be the same
using absorption or marginal costing principles.
(2 marks)
©2014 DeVry/Becker Educational Development Corp. All rights reserved. (10 marks)
7
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
MCQs 8 COST CLASSIFICATIONS
8.1
The following diagram represents the behaviour of one element of cost:
E
$
Total
cost
Volume of activity
0
PL
Which ONE of the following statements is consistent with the above diagram?
Annual factory power cost where the electricity supplier sets a tariff based on a
fixed charge plus a constant unit cost for consumption but subject to a maximum
annual charge.
B
Weekly total labour cost when there is a fixed wage for a standard 40 hour week but
overtime is paid at a premium rate.
C
Total direct material cost for a period if the supplier charges a lower unit cost on all
units once a certain quantity has been purchased in that period.
D
Total direct material cost for a period where the supplier charges a constant amount
per unit for all units supplied up to a maximum charge for the period.
SA
M
A
8.2
An organisation manufactures a single product. The total cost of making 4,000 units is
$20,000 and the total cost of making 20,000 units is $40,000. Within this range of activity the
total fixed costs remain unchanged.
What is the variable cost per unit of the product?
A
B
C
D
8
$0·80
$1·20
$1·25
$2·00
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
8.3
When total purchases of raw material exceed 30,000 units in any one period then all units
purchased, including the initial 30,000, are invoiced at a lower cost per unit.
Which of the following graphs is consistent with the behaviour of the total materials cost
in a period?
$
$
B
Units
30,000
$
Units
0
$
C
30,000
PL
0
E
A
D
Units
0
Units
0
30,000
The total cost of production for two levels of activity is as follows:
SA
M
8.4
30,000
Production (units)
Total cost ($)
Level 1
3,000
6,750
Level 2
5,000
9,250
The variable production cost per unit and the total fixed production cost both remain constant
in the range of activity shown.
What is the variable production cost per unit?
A
B
C
D
$0·80
$1·25
$1·85
$2·25
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 9
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
8.5
A manufacturing company has four types of cost (identified as T1, T2, T3 and T4).
The total cost for each type at two different production levels is:
Total cost for Total cost for
125 units
180 units
$
$
1,000
1,260
1,750
2,520
2,475
2,826
3,225
4,644
Cost type
T1
T2
T3
T4
8.6
T1 and T3
T1 and T4
T2 and T3
T2 and T4
PL
A
B
C
D
E
Which two cost types would be classified as being semi-variable?
Up to a given level of activity in each period the purchase price per unit of a raw material is
constant. After that point a lower price per unit applies both to further units purchased and
also retrospectively to all units already purchased.
Which of the following graphs depicts the total cost of the raw materials for a period?
$
$
B
SA
M
A
Units
Units
0
0
$
$
C
D
Units
0
10
Units
0
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
8.7
An organisation has the following total costs at two activity levels:
Activity level (units)
Total costs ($)
17,000
140,000
22,000
170,000
Variable cost per unit is constant in this range of activity and there is a step up of $5,000 in
the total fixed costs when activity exceeds 18,000 units.
What is the total cost at an activity level of 20,000 units?
A supplier of telephone services charges a fixed line rental per period. The first 10 hours of
telephone calls by the customer are free, after that all calls are charged at a constant rate per
minute up to a maximum, thereafter all calls in the period are again free.
PL
8.8
$155,000
$158,000
$160,000
$163,000
E
A
B
C
D
Which of the following graphs depicts the total cost to the customer of the telephone
services in a period?
$
$
B
SA
M
A
Hours
0
$
$
C
0
Hours
©2014 DeVry/Becker Educational Development Corp. All rights reserved. Hours
0
D
0
Hours
11
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
8.9
The following production and total cost information relates to a single product organisation
for the last three months:
Month
Production
units
1,200
900
1,400
1
2
3
Total cost
$
66,600
58,200
68,200
E
The variable cost per unit is constant up to a production level of 2,000 units per month but a
step up of $6,000 in the monthly total fixed cost occurs when production reaches 1,100 units
per month.
A
B
C
D
8.10
For which of the following is a profit centre manager normally responsible?
A
B
C
D
Costs only
Revenues only
Costs and revenues
Costs, revenues and investment
Reginald is the manager of production department M in a factory which has ten other
production departments. He receives monthly information that compares planned and actual
expenditure for department M. After department M, all production goes into other factory
departments to be completed prior to being despatched to customers. Decisions involving
capital expenditure in department M are not taken by Reginald.
SA
M
8.11
$54,200
$55,000
$59,000
$60,200
PL
What is the total cost for a month when 1,000 units are produced?
Which of the following describes Reginald’s role in department M?
A
B
C
D
8.12
A cost centre manager
An investment centre manager
A profit centre manager
A revenue centre manager
The following observations have been made of total overhead cost:
Output level (units)
Total overhead cost ($)
5,000
14,000
10,000
27,000
The variable element of total overhead cost is known to increase by $1 per unit at output
levels above 7,000 units.
What is the variable element of total overhead cost at an output level of 5,000 units?
A
B
C
D
12
$2.00 per unit
$2.60 per unit
$3.20 per unit
$3.60 per unit
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
8.13
A company has the following data for a semi-variable cost:
Output
Total cost
20,000 units
$85,000
60,000 units
$253,000
The fixed element of total cost increases by $8,000 at output levels in excess of 30,000 units.
What is the variable cost per unit?
8.14
$4·00
$4·20
$4·22
$4·25
E
A
B
C
D
A product has the following costs per unit:
$
4·00
3·00
1·50
5·00
6·00
PL
Direct material
Direct labour
Direct expenses
Variable overhead
Fixed overhead
What is the prime cost per unit of the product?
A
B
C
D
A company has a single product with a selling price of $12 per unit, which is calculated as
variable cost per unit, plus 20%. At an output level of 5,000 units it makes a loss of $8,000.
SA
M
8.15
$4·00
$7·00
$8·50
$13·50
What is the company’s total fixed cost?
A
B
C
D
8.16
$2,000
$4,000
$18,000
$20,000
A company’s total overhead varies with output level.
observations of output and total overhead cost:
Output level
100,000 units
400,000 units
It has recorded the following
Total overhead cost
$800,000
$2,500,000
It is known that there is an increase in fixed costs of $200,000 when output exceeds 300,000
units.
Using the high low method, what is the variable overhead cost per unit?
A
B
C
D
$5·00 per unit
$5·67 per unit
$6·25 per unit
$6·60 per unit
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 13
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
8.17
Which of the following would NOT be controllable by the manager of a profit centre?
A
B
C
D
Direct labour cost
Direct material cost
Depreciation
Variable overhead
(34 marks)
Question 9 PRESENTING INFORMATION
A
B
C
D
9.2
Which of the following would best present the number of manufacturing companies in
different areas of the country over time?
A
B
C
D
9.3
Line graph
Bar chart
Pie chart
Scatter diagram
E
Which of the following would best present how an organisation spent its income for one
year?
PL
9.1
Compound bar chart
Line graph
Pie chart
Scatter graph
Which of the following would best present monthly sales revenue over a year?
Bar chart
Line graph
Pie chart
Scatter diagram
SA
M
A
B
C
D
9.4
Which of the following would most usefully present information about a company’s
sales of air-conditions according to daily temperature?
A
B
C
D
9.5
Bar chart
Line graph
Pie chart
Scatter diagram
The following statements relate to pie charts:
(1)
(2)
(3)
They are a graphical representation of relative frequency of quantitative data
Comparisons can be made more accurately with pie charts than with bar charts
The area of each segment is proportional to the percentage it represents
Which statements are true?
A
B
C
D
14
1 and 2 only
1 and 3 only
2 and 3 only
1, 2 and 3
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
9.6
A group of 60 trainee accountants were asked about their favourite sport. They chose as
follows:
Rugby
Cricket
Swimming
Basketball
Athletics
15
12
12
11
10
The data is to be presented in a pie chart.
A
B
C
D
E
What will be the angle of the segment which represents rugby?
15
60
90
120
PL
(12 marks)
Question 10 WIVELSFIELD
Wivelsfield currently uses the economic order quantity (EOQ) to establish the optimal reorder quantity
for purchasing the main raw material used in its production process. The company has been
approached by an alternative supplier who would be willing to offer the following discounts:
Discount
1%
3%
5%
7%
SA
M
Order level
0 – 199 units
200 – 499 units
500 – 699 units
700 units or more
Information regarding current inventory costs is as follows:
Holding cost per unit per year = 10% of purchase price
Order costs = $2 per order
Annual demand = 15,000 units
Purchase price = $15
Current EOQ = 200 units
Required:
(a)
Calculate the new optimal order quantity.
(6 marks)
(b)
Explain your approach with regard to each discount band.
(4 marks)
©2014 DeVry/Becker Educational Development Corp. All rights reserved. (10 marks)
15
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
108.18
A chain of supermarkets compares the performance of its fleet of delivery lorries with that of
a successful company that delivers goods by road.
Which type of benchmarking is it using?
A
B
C
D
A division earns a residual income of $200,000. The imputed interest charge is $150,000 and
its cost of capital is 20% per year.
E
108.19
Internal
Competitive
Functional
Strategic
A
B
C
D
108.20
5·3%
6·7%
26·7%
46·7%
PL
What is the division’s return on capital employed?
Which term is applied to management’s ability to monitor and supervise expenditure in
order to ensure that organisational objectives are achieved?
A
B
C
D
Cost control
Cost reduction
Cost allocation
Cost absorption
SA
M
(40 marks)
110
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REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
MCQs 1 ACCOUNTING FOR MANAGEMENT
Item Answer Justification
1.1
A
Certainly not operational (“day-to-day”). Not strategic because this is longer term.
“Planning” is another name for “strategic”.
1.2
D
1.3
B
1.4
C
1.5
B
1.6
C
The concept of a cost unit is specific to costing for management purposes. Both
management and financial accounting will involve the other features.
1.7
B
Management information is not necessarily detailed. For example, information for
strategic purposes will not have the same level of detail as information for day-today management. In managing “by exception” it is the lack of detail (of the nonexceptional items) that makes it most useful. Even financial information should not
be provided if its cost.
1.8
C
Management information is provided for these purposes.
1.9
D
A report format is not essential (so not A). Detailed calculations in support of
information may be superfluous and therefore not essential (so not B). Regular
information is not necessarily useful and though information which is reported
irregularly, by exception will be useful (so not C).
SA
M
PL
E
Followed by A, then B, then D.
1.10
A
B is part of the decision-making process and C and D concern the planning process.
1.11
B
(1) is not true because cost should not exceed benefit. (3) is not true detail and
accuracy may result in information being no longer relevant.
1.12
A
Only internal stakeholders will have access to management accounting information
which will concern revenues also.
1.13
D
(1) is absolutely not true since up-to-date absorption costs of inventory will be those
used for external reporting in the annual financial statements. (2) is not true and in
some jurisdictions there may be no legal requirement even for financial accounts to
be prepared (e.g. for entities meeting certain criteria).
1.14
A
(2) and (4) are characteristics of financial reporting.
1.15
A
See item 1.9. This item clearly shows how essentially the same question can be
asked but in a different way.
1.16
A
See 1.7. This item shows how a true/false matrix can be presented to test essentially
the same knowledge.
1.17
A
Each management report should be specific to the needs of the user(s) and should
not be too detailed, complete or accurate at the expense of being timely (and
therefore relevant).
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 1001
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
Answer 2 SOURCES
(a)
Primary and secondary
Primary data can be collected directly through questionnaires, depth interview, focus group
interviews, case studies, experimentation and observation. Secondary data can be obtained
through:


Internal and external sources
E
(b)
Internal sources (i.e. within the organisation);
External sources (i.e. outside the organisation).
If available, internal secondary data may be obtained with less time, effort and money than
external secondary data. Also it may also be more relevant to a given situation if the
information is specific to the organisation.
PL
Examples

Accounting resources are a main source of documented information (e.g. about
costs, assets, etc).

Price lists provide information about selling prices and possibly discount structures
also. This information is made available outside the organisation.

Internal experts include those who are responsible for each department (e.g. factory
supervisor, HR manager, head of IT). They can provide information that is not
necessarily documented.
SA
M
If data available within the organisation is unsuitable or inadequate, external secondary data
sources may be sought. These are outside the company in a larger environment. Collection
of external data is more difficult because the data have much greater variety and the sources
are much more numerous.
Examples
1002

Government sources provide an extremely rich pool of data, much of which is freely
available through the internet. There are many government agencies which generate
data. For example, a central statistics office publishing national statistics about
growth rates in major economic activities.

A government agency which is particularly relevant to accountants seeing
information about other companies (e.g. for benchmarking purposes) is that which
is responsible for the registration of companies (e.g. Companies House in UK). In
most jurisdictions legislation requires that legal entities file “returns” about directors
and annual financial statements. These may be publicly available.

Non-government industry publications include those of trade associations, chambers
of commerce, associations of press media, industry development boards, export
promotion councils, etc.

Stock exchanges publish details of listings and statistics on domestic and
international companies admitted to their market.
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)

Research companies (e.g. IPSOS Mori) specialise in research in the areas of
advertising (e.g. brand recognition and communications), loyalty (for both customer
and employee relationship management), marketing (e.g. consumer, retail,
healthcare), media and technology, social and political research and reputation
research. Some of their research findings are published in the internet.
E
Tutorial note: There are many other examples for which credit would be awarded. For
example, an annual industry survey may provide information about the total number of
workers employed, units produced, material used and value added by manufacturers.
Another example is that a ministry (e.g. of commerce and industries) provides information
wholesale and retail prices. Indices may be related to a sector (e.g. food, fuel, agricultural
produce).
Answer 3 ECONOMIC ENVIRONMENT
(a)
Factors





(b)
Changes
PL
The economic environment consists of factors that affect consumer purchasing power and
spending patterns. Economic factors include:
business cycles;
inflation;
unemployment;
interest rates; and
income.
SA
M
Changes in major economic variables have a significant impact on the marketplace. For
example, income affects consumer spending which affects sales for organisations. It is
generally accepted that, as income rises, the proportion of income that is spent on food will
decrease, while the proportion spent on housing remains constant.
People spend, save, invest and try to create personal wealth with differing amounts of money.
Trends in the economic environment show changes in consumer-expenditure patterns from
which predictions can be made. For organisations too, when there is an economic downturn
expenditure will be cut to maintain profits. Budgets for recruitment, marketing and training
are often regarded as discretionary and may be the first to go in a financial crisis. This
impacts on the sales of their providers of these and related services. The need to cut costs
may drive down prices as suppliers compete to keep their customers. Businesses will look for
cheaper alternatives which could involve outsourcing, restructuring, relocation or taking “inhouse” some activity that was previously outsourced.
MCQs 4 SAMPLING TECHNIQUES
Item Answer
Justification
4.1
D
An identifiable sub-population is a “stratum”.
4.2
D
Only random sampling gives each item in the population an equal chance of being
selected (so that the sample is representative). Multi-stage is a series of random
samples.
4.3
C
This creates a cluster, by area. A is interval (or systematic) sampling. B is not
sampling as an entire population of companies is taken. D is random sample
selection.
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 1003
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
4.4
A
Cluster sampling involved random sampling from small areas.
4.5
B
When different characteristics are associated with identifiable sub-populations a
more representative sample is obtained by selecting items from each stratum.
Answer 5 TOTAL COSTS
High-low method
113,201  102,476 10 ,725

= $4.29 (variable cost per unit)
14 ,000  11,500
2,500
Answer 6 AVOIDABLE
(a)
Avoidable vs unavoidable
E
Fixed costs = 113,201 – (14,000 × 4.29) = $53,141
PL
“Avoidable” costs are costs whose incurrence depends upon the course of action chosen from
alternatives which are under consideration. These costs will be relevant for decision making
purposes. “Unavoidable” costs are costs which will be incurred regardless of the course of
action chosen, and will therefore not be relevant costs for the purpose of decision making. In
the long term all costs could become avoidable.
For example, a manufacturing company may be considering whether to continue to
manufacture, or instead to buy-in, one of the many components that it currently produces in
its factory.
SA
M
Many of the costs incurred in the factory will be unavoidable whichever of the alternatives is
chosen because the factory will continue to be used for the production of many other
components. Examples of such costs would be rent and rates of the factory and the factory
manager’s salary.
However, other costs may be avoidable (or at least partly avoidable) according to the
alternative chosen. Examples of completely avoidable costs in such a situation are the
bought-in cost of the component and the material costs incurred in its manufacture.
Avoidable costs are relevant to the decision between alternatives, whereas unavoidable costs
are not.
Some costs may fall into each category, for example labour costs. In the short term you must
pay a basic wage to your employees, this cost is unavoidable, but you would only have to pay
overtime if the workforce worked over their basic hours, therefore the overtime premium is an
avoidable cost.
(b)
Cost centres and cost units
A “cost centre” is a part of the business (a department, location, or item of equipment) in
relation to which costs may be identified for the purposes of cost control and product costing.
For example, separate production and service departments in a factory may each be a cost
centre. Alternatively, a department may consist of more than one cost centre where costs may
be separately ascertained for each cost centre. It is highly likely that an individual will be
given responsibility for managing the costs of the cost centre.
1004
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
A “cost unit” is a quantitative unit of product or service in relation to which costs are
ascertained. In manufacturing, cost units will be units of output produced within production
cost centres. If the manufacturing unit is operating on an individual job order basis, the cost
unit will be the individual jobs. If the manufacturing unit is a continuous production process
with output of homogeneous product, the cost unit will be a standardised quantity of output
expressed in terms of units, weight or volume (e.g. cost per kg of manufactured output).
Similarly, in a service environment (business or cost centre) costs may be related either to
individual jobs or per unit of service (e.g. cost per hour of service).
Answer 7 ARCHIBALD
High-low method
(i)
E
(a)
Variable production cost per unit
Units
Difference
2,000
1,800
——
200
——
PL
Higher level
Lower level
Total cost
$
188,000
180,000
———
8,000
———
Variable production cost per unit = 8,000 ÷ 200 = $40
(ii)
Total monthly fixed production cost
Total production cost for 2,000 units
Less total variable production cost (2,000 × 40)
SA
M
Total monthly fixed production cost
(b)
$
188,000
(80,000)
————
108,000
————
Marginal costing
(i)
Total contribution
Contribution per unit (180 – 40) = $140
Total contribution from sales = 1,200 × 140 = $168,000
(ii)
Net profit
Total contribution [as in (b)(i)]
Less Total fixed costs (108,000 + 41,000)
Net profit
(c)
$
168,000
(149,000)
————
19,000
————
Circumstances
When the number of units produced and the number of units sold in a month are identical, the
net profit or loss determined by using absorption and marginal costing principles will also be
the same. In other words the net profit or loss will be the same when the opening and closing
inventory for a month is unchanged.
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 1005
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
MCQs 8 COST CLASSIFICATIONS
Item Answer Justification
8.1
A
8.2
C
8.3
A
8.4
B
(9,250 – 6,750) ÷ (5,000 – 3,000) = $1·25
8.5
A
Total cost per unit ($)
(125 units)
8·00
14·00
19·80
25·80
$(40,000 – 20,000) ÷ (20,000 – 4,000) units = $1·25 per unit
E
PL
T1
T2
T3
T4
Total cost per unit ($)
(180 units)
7·00
14·00
15·70
25·80
A
Raw materials has a variable cost so for zero purchases cost is $Nil. When the point
at which the lower price applies is reached there is effectively a rebate represented
by a discontinuity. The variable cost is then less so the line beyond the
discontinuity has a less steep gradient.
8.7
C
Variable cost per unit = [(170,000 – 5,000) – 140,000)] ÷ (22,000 –17,000) = $5
Total fixed cost above 18,000 units = 170,000 – (22,000 × 5) = $60,000
Total cost of 20,000 units = (20,000 × 5) + 60,000 = $160,000
8.8
A
The fixed cost is indicated on the vertical axis. That it is initially free is shown by a
horizontal line. It then increases at a constant rate before until it reaches the
maximum.
SA
M
8.6
8.9
C
Units
1,400
1,200
–––––
200
–––––
Total cost ($)
68,200
66,600
––––––
1,600
––––––
Variable cost per unit = (1,600 ÷ 200) = $8
Total fixed cost (above 1,000 units) = [68,200 – (1,400 × 8)] = $57,000
Total cost for 1,000 units = [(57,000 – 6,000) + (1,000 × 8)] = $59,000
8.10
C
8.11
A
8.12
A
Total overhead costs include the same fixed cost and at the higher output level
include $3,000 (3,000 × $1) for the increase in variable cost. The variable cost up
to 7,000 units is therefore ($27,000 – $14,000 – $3,000) ÷ (10,000 units – 5,000
units) = $2 per unit.
8.13
A
($253,000 – $85,000 – $8,000) ÷ (60,000 – 20,000) = $4·00
8.14
C
Prime cost is the total direct cost.
1006
By definition of profit.
©2014 DeVry/Becker Educational Development Corp. All rights reserved.
REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
8.15
C
(5,000 × $12 × 20 ÷ 120) + 8,000 = $18,000
8.16
A
($2,500,000 – $800,000 – $200,000) ÷ (400,000 – 100,000)
8.17
C
Depreciation expense is a function of investment in non-current assets which would
not be controllable by a profit centre manager.
Answer 9 PRESENTING INFORMATION
Justification
9.1
C
A pie chart would best show the proportion of each expense for one year. A bar
chart is more suitable for making comparisons (so would need to be for more than
one year. A line graph would not be suitable as this connects pairs of successive
data (which may reveal trends). A scatter diagram would be wholly unsuitable.
9.2
A
A multiple bar chart would also be suitable. A line graph could only show the totals
over time but not their make-up by area. A pie chart is suitable for one period of
time only. A scatter graph could only plot totals over time.
9.3
B
Sales revenue is the variable that is being considered over time. A line graph is
more suitable than a scatter diagram because for each month there is only one value
for sales.
9.4
D
As there will be multiple values of sales for the same temperature the scatter graph
will be more suitable than a line graph.
9.5
B
More accurate comparisons can be made with bar charts. Consider, for example, a
circle divided into 5 equal segments – this would be equivalent to a bar chart with 5
bars of the same height. If the values were quite close but not equal this would be
clear on a bar chart but may be impossible to discern from a pie chart.
SA
M
PL
E
Item Answer
9.6
C
15 ÷ 60 = ¼. Therefore the angle will be ¼ × 36090

Answer 10 WIVELSFIELD
(a)
New optimal order quantity
EOQ new =
2  2  15,000
15  97%  10% = 203 units
Order quantity Purchase costs
Q
p×D
203
15 × 97% × 15,000
Order costs
Co×D/Q
15,000
203
= 148
2×
= 218,250
500
15 × 95% × 15,000
2×
= 213,750
700
15 × 93% × 15,000
2×
= 209,250
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 15,000
500
= 60
15,000
700
= 43
Holding costs
Q×Ch/2
(15 × 97% × 10%) ×
Total cost
203
2
= 148
(15 × 95% × 10%) ×
218,546
500
2
= 356
(15 × 93% × 10%) ×
= 488
214,166
700
2
209,781
1007
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
The best option is to order 700 units at a time, as this results in the lowest total cost.
(b)
Approach to discount band
The discount band of 0 – 199 units has been ignored as this is below the current EOQ. The
EOQ was recalculated as it is now subject to a discount. For all the other discount bands the
revised inventory costs were calculated taking into account the new purchase price.
Answer 11 EOQ
EOQ
(b)
2C 0 D
=
Ch
2  200  12,000
= 2,000 units
$1.2
E
EOQ =
Revised annual total materials costs
$
180,000
PL
(a)
Purchase costs (12,000 × $15)
12,000
× 200
Order costs
2,000
2,000
× 15 × 0·08
Holding costs
2
1,200
1,200
–––––––
182,400
183,000
–––––––
600
–––––––
Original materials costs
SA
M
Saving
(c)
Ways in which discounts might affect EOQ and subsequent material costs
Discounts are likely to increase the EOQ as the holding cost will be reduced.
Since the purchase price is lower the total purchase cost will be reduced.
As the order cost uses the EOQ to divide the total demand, this cost will be reduced as the
EOQ has increased.
The holding cost will change as it uses both the increased EOQ and a reduced purchase price.
Answer 12 GOODHEART HOSPITAL
(a)
EOQ
(i)
Current year
[(2 × 25 × 90,000) ÷ 8]0·5 = 750 units
(ii)
Next year
[(2 × 36 × 90,000) ÷ 8]0·5 = 900 units
1008
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REVISION QUESTION BANK – MANAGEMENT ACCOUNTING (F2/FMA)
(b)
Increase in total annual cost
Annual
Annual
holding cost ordering cost
$
$
Current year
(750 ÷ 2) × 8
(90,000 ÷ 750) × 25
3,000
Next year
(900 ÷ 2) × 8
(90,000 ÷ 900) × 36
3,600
3,000
3,000
–––––
6,000
–––––
3,600
3,600
–––––
7,200
–––––
E
3,000
Annual
total cost
$
3,600
Major costs associated
(i)
Holding inventory (2 only require)




Interest on net working capital.
Costs of storage space
Insurance costs
Obsolescence, pilferage and deterioration.
(ii)
Ordering inventory


Costs of contacting supplier to place an order.
Costs associated with checking goods received and transport costs.
SA
M
(c)
PL
Total additional cost of holding and ordering inventory for next year $1,200 (compared with
the current year).
Answer 13 JANE
(a)
EOQ
[(2 × 12·50 × 8,760) ÷ (0·05 × 80)] = 234 units
(b)
Inventory level
Usage per day = 8,760 ÷ 365 = 24
Re-order level = 24 × 3 days = 72 units
(c)
Terms
A stock out occurs when a company runs out of inventory. There are costs associated with
this – lost contribution from lost sales, for example. In order to avoid a stock out the
company could set a buffer inventory. This is a safety level of inventory to cover emergency
situations such as demand and/or lead times exceeding their average levels. The holding of a
buffer inventory involves an additional cost.
©2014 DeVry/Becker Educational Development Corp. All rights reserved. 1009
MANAGEMENT ACCOUNTING (F2/FMA) – REVISION QUESTION BANK
(d)
Circumstances
Jane should consider having a buffer inventory if either the usage of component RB starts to
fluctuate from period to period (at present it is constant) and/or the lead time starts to fluctuate
from its present constant level of 3 days.
Answer 14 POINT
(a)
Material Y
(i)
Using EOQ exam formula
EOQ = [(2 × 120 × 48,000) ÷ (0·10 × 80)] = 1,200 units
E
(ii)
Total annual cost
$
3,840,000
4,800
4,800
––––––––
3,849,600
––––––––
(b)
PL
Purchasing cost (48,000 × $80)
Ordering cost (48,000 ÷ 1,200) × $120
Holding costs [(1,200 ÷ 2) × $80 × 0·10]
Total cost
SA
M
Total cost
Annual total saving (3,849,600 – 3,812,400)
3,801,600
2,880
7,920
––––––––
3,812,400
––––––––
½
1
1
37,200
½
———
3
———
Holding costs
Insurance costs of inventory and warehouse
Rent of warehouse
Wages and salaries of warehouse employees (store men)
Interest on capital tied up in inventory held
½ for each
example
———
2
———
MCQs 15 MATERIALS
Item Answer Justification
EOQ =
(2  20  ( 4  12,500)
= 1,155
0.10  15
15.1
D
15.2
D
15.3
C
Maximum usage × Longest lead time = 520 × 15 = 7,800
15.4
C
EOQ = ½ [(2 × 160 × 9,000) ÷ (0·08 × 40)] = 949
1010
½
1
1
———
4
———
Total annual cost saving
Purchasing cost (48,000 × $80 × 0·99)
Ordering cost (48,000 ÷ 2,000) × $120
Holding costs [(2,000 ÷ 2) × $80 × 0·99 × 0·10]
(c)
1½
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PL
E
Management
Accounting
Paper F2
Fundamentals Level – Knowledge Module
M
Specimen Exam applicable from June 2014
Time allowed: 2 hours
This paper is divided into two sections:
SA
Section A – ALL 35 questions are compulsory and MUST
be attempted
Section B – ALL THREE questions are compulsory and MUST
be attempted
Formulae Sheet, Present Value and Annuity Tables are on
pages 16, 17 and 18.
Do NOT open this paper 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 35 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
A manufacturing company benchmarks the performance of its accounts receivable department with that of a leading
credit card company.
What type of benchmarking is the company using?
2
Which of the following BEST describes target costing?
A
B
C
D
3
Internal benchmarking
Competitive benchmarking
Functional benchmarking
Strategic benchmarking
PL
E
A
B
C
D
Setting
Setting
Setting
Setting
a
a
a
a
cost by subtracting a desired profit margin from a competitive market price
price by adding a desired profit margin to a production cost
cost for the use in the calculation of variances
selling price for the company to aim for in the long run
Information relating to two processes (F and G) was as follows:
Process
Input
(litres)
65,000
37,500
Output
(litres)
58,900
35,700
M
F
G
Normal loss as
% of input
8
5
For each process, was there an abnormal loss or an abnormal gain?
Process G
Abnormal gain
Abnormal loss
Abnormal gain
Abnormal loss
SA
A
B
C
D
Process F
Abnormal gain
Abnormal gain
Abnormal loss
Abnormal loss
4
The following budgeted information relates to a manufacturing company for next period:
Production
Sales
Units
14,000
12,000
Fixed production costs
Fixed selling costs
The normal level of activity is 14,000 units per period.
Using absorption costing the profit for next period has been calculated as $36,000.
What would be the profit for next period using marginal costing?
A
B
C
D
$25,000
$27,000
$45,000
$47,000
2
$
63,000
12,000
(ii)
Profit before interest and tax/Sales revenue:
$48m ÷ $480m = 10%
(iii) Sales revenue/capital employed = $480m ÷ 192m = 2·5
(iv) Average number of telephones unrepaired at the end of each day/Number of telephones returned for repair:
(804 ÷ 10,000)*365 days = 29·3 days
Percentage of customers lost per annum = number of customers lost ÷ total number of customers x 100% =
117,600 ÷ 1,960,000 = 6%
(ii)
Percentage of sales attributable to new products = Sales attributable to new products/total sales x 100% = $8m ÷
$480m = 1·67%
(i)
Customer satisfaction perspective:
(ii)
Growth perspective:
PL
E
The customer perspective considers how the organisation appears to existing and new customers. It aims to improve
quality of service to customers and looks at cost, quality, delivery, inspection, handling, etc.
The learning and growth perspective requires the organisation to ask itself whether it can continue to improve and create
value. If an organisation is to continue having loyal, satisfied customers and make good use of its resources, it must
keep learning and developing.
(iii) Financial success perspective:
The financial perspective considers how the organisations create value for the shareholders. It identifies core financial
themes which will drive business strategy and looks at traditional measures such as revenue growth and profitability.
(iv) Process efficiency perspective:
The process perspective requires the organisation to ask itself the question ‘what must we excel at to achieve our
financial and customer objectives?’ It must identify the business processes which are critical to the implementation of
the organisation’s strategy and aims to improve processes, decision making and resource utilisation.
(Note: Only one was required)
SA
(c)
(i)
M
(b)
24
E
PL
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This ACCA Revision Question Bank has been reviewed
by ACCA's examining team and includes:
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
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