If you are preparing for your ACCA Performance Management exam, don’t worry. In this article, we explore several questions and concerns to help you get the most out of your revision. This includes:

• The objective and core areas of the exam
• How the exam is structured
• The benefits of studying ACCA Performance Management
• Challenges
• An example exam question
• Additional resources

What are the exam topics?

The ACCA Performance Management exam aims to provide you with the knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for planning, decision-making, performance evaluation and control.

The main topics covered in the ACCA Performance Management syllabus are:

• Management information systems and data analytics - including controls, data visualisation, types of information system, and big data.
• Specialist cost and management accounting techniques - including activity-based costing, target costing, lifecycle costing, throughput accounting, and environmental management accounting.
• Decision making techniques - including cost volume profit analysis, planning with limiting factors, pricing, relevant costing, and risk and uncertainty.
• Budgeting and control - including budgeting, quantitative techniques, and variance analysis.
• Performance measurement and control - including financial and non-financial performance measurement, divisional performance measurement and transfer pricing, and performance measurement in not-for profit organisations and the public sector.

What is the exam structure?

The syllabus is assessed by a three-hour computer-based examination (1.8 minutes per mark). All questions are compulsory with a mixture of computational and discursive elements.

How does the ACCA Performance Management exam subject help towards my studies and career?

The ACCA Performance Management exam builds key skills that are highly valuable in most finance roles.

It helps your studies in the following ways:

• Builds on your foundation - it follows on from Management Accounting (ACCA MA) at the Applied Knowledge level, so it strengthens your understanding of costing, budgeting and performance analysis.
• It prepares you for the Strategic Level - Performance Management introduces core techniques which are developed further in Strategic Business Leader (ACCA SBL) and Advanced Performance Management (ACCA APM).
• Encourages application - ACCA exams focus on applying knowledge, not just rewriting out learnt facts, which benefits you in future exams.

It helps your career in the following ways:

• Improves problem solving - techniques such as variance analysis, cost-volume-profit analysis and limiting factor analysis are used regularly in real business scenarios.
• Builds commercial awareness - topics such as budgeting, costing and performance measurement help you understand how businesses operate and succeed.
• Transferable skills - techniques learnt are useful in industries beyond finance, such as consulting, operations and project management.
• Prepares you for senior roles - the ability to evaluate performance is essential for more senior roles in an organisation like finance manager.

What are some of the key challenges for the ACCA Performance Management exam?

Mix of calculation and discursive elements

Challenge: Many learners focus too much on numbers and ignore written parts.

Solution: Attempt written parts first where possible, allocate time fairly across each part (1.8 minutes per mark), practice both types of questions in full while revising, create a short answer plan and use headings in narrative answers to provide structure.

Quantity of formula

Challenge: A formula sheet is provided but many formulae need to be learnt.

Solution: Understand the formula, write them on flashcards and test yourself, write them on sticky notes and put them in a place you often see them, practice using the formula regularly.

Application not theory

Challenge: Rote learning will not prepare a learner properly for the exam as you must apply your knowledge to the scenario given.

Solution: Spend time understanding the requirement and answer it specifically using the information available. Practice past paper questions in full to develop this skill.

Tricky topics

Challenge: Learners find topics including graphs and algebra difficult such as cost-volume-profit analysis, linear programming, algebraic pricing, and learning curves.

Solution: Understand the assumed knowledge first, such as how to draw and interpret a graph, order of operations, how to rearrange equations, how to solve simultaneous equations, and how to use your calculator effectively.

Example question and answer

The below question is from the June 2024 Performance Management examiner’s report:

Douglas Co is producing a new product and expects its workforce to experience an 85% learning curve in production. The estimated labour time for the first batch of the new product is 260 hours and the estimated cumulative average time per batch for the eighth batch is 159.83 hours.

Note: Use the learning index of -0.234 for an 85% learning curve.

What is the expected incremental time for the eighth batch of the new product (to one decimal place)?

A. 164.9 hours

B. 162.4 hours

C. 120.7 hours

D. 124.3 hours

Answer workings:

The learning curve formula is given on the formulae sheet as follows:

Y = axb

Where:

Y = cumulative average time per unit to produce x units

a = the time take for the first unit of output

x = the cumulative number of units produced

b = the index of learning (log LR/log2) where LR = the learning rate as a decimal

This formula will enable you to calculate the cumulative average time for a stated number of units (or batches). To obtain a total time it will be necessary to multiply this cumulative average time by the number of units (or batches).

To calculate the time for the eighth batch it is necessary to calculate the total time for the first eight batches and deduct the total time for the first seven batches.

As the learning curve applies to batches in this question, we will need to adapt the formula.

Y = cumulative average time per batch to produce x batches (for 8 batches this is 159.83 hours and we will need to calculate this for 7 batches)

a = the time take for the first batch of output = 260 hours

x = the cumulative number of batches produced (7 batches to find the cumulative average time per batch to produce the first 7 batches)

b = the index of learning (log LR/log2) = -0.234 (there is no need to calculate this as it has been given in the information)

Total time to make the first eight batches = cumulative average time per batch for 8 batches x 8 batches = 159.83 x 8 = 1,278.64 hours

Using the formula on the formula sheet, cumulative average time for the first seven batches:

Y = axb where a = 260, x = 7 and b = -0.234

Y = 260 x 7-0.234 = 164.90 hours (you will need to use the nth power button on your calculator)

Total time for the first seven batches = 164.90 x 7 = 1,154.30 hours

Therefore, the incremental time for the eighth batch = 1,278.64 – 1,154.30 = 124.34 hours.

Answer D.

Additional support and resources

If you’re not already studying ACCA Performance Management with us at Kaplan, give yourself the best chance to pass the exam with our ACCA PM course. With four study methods, you’ll find a course that’s perfect for you.

When studying with Kaplan, you will have access to the Academic Support team via the ‘contact a tutor’ option on your MyKaplan. They are available seven days a week and can support you with any tricky topics via live chat, email, or by requesting a call back.

And if you have any additional learning needs, get in touch with our inclusion team who can support you.

Practicing exam-standard questions in timed conditions is essential when preparing for your real exam. Be encouraged to practice questions in the ACCA practice platform when possible.

Alternatively, Kaplan Publishing, an ACCA Content Partner, also offers ACCA Study Texts, Exam Kits, and Pocket Notes - which cover the full syllabus and help you feel exam confident.