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Revision Part 2
Lecture 24



Semester 2 Topics
Key topics we covered:
Control
Budgeting
Variance analysis
Performance Measurement Techniques
Transfer Pricing
Balanced Scorecard
Quality Control
Managing Change

Control
Part of the planning and control cycle
Need for controls

Designing control systems
Action/Results/Personnel

Costs of control
Dysfunctional effects
Budgeting
What is a budget? How does it change

What are the advantages for budgeting?

Who is responsible for budgeting?

The different types of budgets in particular pay attention to
preparing the budgeted income statement, cash budget and
statement of financial position.
Master budgets
Variances
Flex the budget
Compare actual to flex
Calculate variances:
Price variance= (AP x AQ) (SP x AQ)
Efficiency variance= (SP x AQ) (SQ x SP)
Sales variances
OH variance variable and fixed
Reconcile budgeted to actual profit
See tutorial 8
Performance Measurement and TF Pricing
Financial Performance Measurement
ROI
RI
EVA

Transfer Pricing
Describe the purpose and mechanisms of transfer prices
1. To motivate the decision maker (divisional manager) to act in the
best interests of the organization as a whole.
2. Provide proper economic signals so that division managers
affected will make good economic decisions from a corporate
standpoint.
3. Transfer pricing enables top management to coordinate actions
and to evaluate performance of divisions.


SMA and the Balanced Scorecard
Describe the balanced scorecard and its four perspectives
Financial
Customer
Internal
Innovation and Learning

Identify some of the benefits of the balanced scorecard relative
to performance measurement systems relying on financial
measures

The Balanced Scorecard (BSC) provides a system for measuring and managing
all aspects of a companys performance.
The BSC includes financial measures that tell the
results of actions already taken;
It complements the financial measures with operational measures on
customer satisfaction, internal processes, and the firms innovation
and improvement activities.

Quality
To define quality
To distinguish between the two types of
quality conformance
To identify the four categories of quality costs
and understand their relationship
To outline the implications of quality
management to management accounting
What is expected in the exam?
A 3 hour closed book exam
Part A, worth 50 marks.
The 50 marks will be made up of both calculation and discursive sections.
Part B of the exam consists of FOUR 25 mark questions, from which
the student will choose any TWO.
These questions will consist of both calculations and discursive elements.

Every tutorial question was structured in the same way as a
standard exam question or a case study question. The answer for
each question is available on Blackboard
Old format
New format
How to score high marks in the exam?
Spend a few minutes planning your answer, then
cross through any work you do not want marked.
Make sure you show ALL your calculations as marks
will be awarded for the working out;
Ensure you actually provide an answer;
Provide sufficient strength, depth, and good quality
in your arguments.
Write legibly



How much time to devote to each section?
Do some calculations:
3 questions to answer in 3 hours
Look at the allocated marks for each sub-question:
Part (a) = 50 marks => 1.5 hours
Part (b) = 2 questions 25 marks each => 45 minutes each
question
Remember to include reading and planning time within
this.

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A final word
Practice, practice, and practice
Your tutorial questions and the questions at the
back of each chapter in the Drury/Burns book.
Read the additional links to ACCA website on BB
ACCA past exam papers F5

GOOD LUCK!

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