ACCA PM — Full Summary | Sep 2026–Jun 2027

ACCA PM · Sep 2026–Jun 2027

Performance Management
Full Summary

Complete course navigation and condensed exam-day reference for ACCA PM — 5 syllabus sections, 21 topics, 210 OT practice questions, examiner intelligence from all 7 sittings (SD22–SD25), plus every key formula and exam trap in one place.

Exam3 hours CBE

Pass mark50%

Section A15 × 2-mark OT

Section B3 cases × 5 OT

Section C2 × 20-mark CR

Topics23 lessons · A–F

Exam Structure

How the PM exam works

Section A (30 marks): 15 standalone OT questions of 2 marks each. Can cover any syllabus area A–E. Mix of MCQ, T/F, number entry, and matching.

Section B (30 marks): 3 case studies, each with 5 OT questions of 2 marks each. Cases drawn from any syllabus area. Cases often involve calculations followed by interpretation questions.

Section C (40 marks): 2 constructed response questions of 20 marks each. One question ALWAYS from Section E (Performance Measurement and Control). The other from Sections C and/or D (Decision-Making and/or Budgeting). Can also incorporate A (data analytics) and sustainability elements. Use spreadsheet tools in the exam.

Timing & Pacing Guide

Internalise this pacing before the exam, not during it. 3 hours = 180 minutes for 100 marks → roughly 1.8 minutes per mark, but Section C needs more thinking time per mark than A/B.

Section A

~50 min

15 × 2-mark OT — aim for ~3 min each; flag and move on if stuck

Section B

~50 min

3 cases × 5 OT — ~16 min per case; read the case once fully before answering

Section C

~35 min each

2 × 20-mark CR (~70 min total) — read requirements FIRST, then the scenario; leave 2 min to review

Buffer

~10 min

Final review buffer — total 50 + 50 + 70 + 10 = 180 minutes

Complete Topic Map

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Real Exam Questions — All 14 Mock Section C Questions

Every Section C constructed-response question from all 7 mock sittings, embedded directly in its topic with the full scenario and model answer.

Sitting	Company	Topic
SD2022	Wyeland Police Forces	E3 — NFP/VFM
SD2022	Keytone Co	C6 — Risk & Uncertainty
MJ2023	Vegan Co	D6 — Planning/Operational Variances
MJ2023	Trot Co	E1 — Performance Measurement
SD2023	Daisy Co	C1 — Relevant Cost Analysis
SD2023	Lemic Air	E1 — Performance Measurement
MJ2024	Venhosp	D2 — Analytical Techniques
MJ2024	Caroline Co	E2 — ROI/RI/Transfer Pricing
SD2024	Global Scan Co	C1 — Relevant Cost Analysis
SD2024	Yetgo Co	E2 — ROI/RI/Transfer Pricing
MJ2025	Eastern Hospitals Trust	E3 — NFP/VFM
MJ2025	Quality Tyre Co	D1 — Budgetary Systems
SD2025	Kaylene Co	C2 — CVP Analysis
SD2025	Klen Co	E1 — Performance Measurement

Top 20 Traps — Most Repeated Examiner Errors

Deduplicated across all 7 sittings — read this list once before anything else below.

Target profit = HIGHER of the mark-up method and the ROI method — not the lower, not an average.
Services are HETEROGENEOUS, not homogeneous — a key reason target costing is hard to apply to services.
Target costing is a FEED-FORWARD control, not feedback.
Multi-product CVP: always use the WEIGHTED AVERAGE C/S ratio, not a simple average.
RI: use PRE-TAX operating profit and the DIVISIONAL (not group/company-average) cost of capital.
Throughput bottleneck = the stage with the LOWEST MAX OUTPUT (capacity ÷ time per unit), not the slowest-looking process.
Rank throughput products by throughput PER BOTTLENECK HOUR, not throughput per unit.
TPAR factory cost = ALL costs except materials, per hour — excludes non-production costs like advertising.
Relevant cost of a machine = HIGHEST alternative use value (opportunity cost) — compare sale proceeds vs rental vs alternative use and take the highest; never use book value, original cost or depreciation.
Minimum/relevant-cost pricing = incremental + opportunity costs only — it can erode perceived value and be hard to raise later.
CVP: break-even RISES by the SAME % as a fixed cost rise; C/S ratio FALLS by MORE than the % of a price cut.
VFM — “economy” must specify APPROPRIATE QUALITY at minimum cost, not just “minimising cost.”
Life-cycle costing: total ALL costs across the FULL life (including decline phase) before dividing by total units.
Shutdown decisions: show contribution to HO separately, then deduct reapportioned HO costs — don’t net them early.
Time series (additive model): seasonal variations MUST sum to zero — use this to find a missing variation.
Learning curve incremental batch time = Total time(n) − Total time(n−1), not the per-unit average difference.
Shadow price is the PREMIUM over the normal price, not the total price paid for the scarce resource.
Transfer pricing: spare capacity → variable cost only; full capacity → market price (reflecting opportunity cost).
Sales quantity variance uses the STANDARD mix of the ACTUAL total quantity — not the actual mix.
ABC only affects OVERHEAD costs — direct costs already attributed to products don’t change under ABC.

Command Word Glossary

How much depth each verb expects — misreading the command word is a common, avoidable way to lose marks.

Verb	What it expects
State / List	Brief, factual points — no explanation needed. Fastest marks available; don’t over-write these.
Explain	State the point AND say why/how it works — one sentence of reasoning per point.
Describe	Give a detailed account of what something is or how a process works, in your own words.
Discuss	Present more than one angle — usually both a point in favour and a limitation or counterpoint.
Calculate	Show the working, not just the final figure — method marks are available even if the final answer is wrong.
Evaluate / Assess	Weigh up the evidence and reach a supported conclusion or judgement — don’t just describe both sides.
Advise / Recommend	Give a clear, justified recommendation applied to the specific scenario — not a generic textbook answer.
Identify	Pick out the specific relevant item(s) from the scenario — precision matters more than volume.

Examiner Intelligence — All 7 Sittings (SD22–SD25)

SD22 — Sep/Dec 2022

Key errors and focus areas

3Es VFM: economy, efficiency, effectiveness must each be explained precisely, not just named
Payoff tables: label rows/columns clearly (options vs states of nature) before calculating EV
Expected value of perfect information: recalculate EV assuming the optimal choice is made in EACH state, then weight by probability
Decision trees: always roll back right to left, showing the EV calculation at every chance node

D25 — Sep/Dec 2025

Key errors and focus areas

Target cost: target profit = HIGHER of mark-up vs ROI per unit — candidates used lower figure
Service characteristics: services are HETEROGENEOUS not homogeneous — a reason target costing is difficult
Target costing = FEED-FORWARD control (not feedback)
CVP multi-product: C/S ratio must be weighted average — show 3 d.p. as instructed
Balanced Scorecard: calculate ratios from raw data for both years; explain changes
Capital gearing: work backwards from interest cover → interest → debt → equity via gearing ratio
Learning rate: 2nd batch data → tabulate cumulative averages → r = avg(2 batches)/avg(1 batch)
Full cost-plus: NOT profit-maximising and NOT penetration pricing

MJ25 — Mar/Jun 2025

Key errors and focus areas

RI: use divisional (not company) cost of capital; use PRE-TAX operating profit
Throughput: identify bottleneck by calculating MAX OUTPUT per stage (capacity ÷ time per unit) — lowest max output = bottleneck
Relevant cost of machine: use HIGHEST alternative use value (opportunity cost), not original cost or resale value alone
Minimum pricing = incremental + opportunity costs only; can erode perceived value; hard to raise later
CVP T/F: break-even rises by SAME % as fixed cost rise; MOS depends on budget; C/S ratio falls by MORE than % price cut
Controls for report distribution: agreed circulation list updated regularly is the key control
VFM: 3Es definition must be complete — “economy = minimising cost” alone insufficient

SD24 — Sep/Dec 2024

Key errors and focus areas

Throughput ranking: rank by throughput PER BOTTLENECK HOUR — not by throughput per unit
TPAR > 1: throughput exceeds operating costs — TPAR < 1: costs exceed throughput
TPAR denominator: total factory cost PER HOUR — excludes non-production costs (advertising)
Life-cycle costing: total all costs across full life → divide by total units → add target profit
Shutdown: show separately: revenue − variable costs − attributable fixed costs = contribution to HO; then deduct reapportioned HO to get profit/loss
Head office reapportionment: separate clinic-specific costs from reapportioned overheads
Time series: additive model seasonal variations MUST sum to zero — use to find missing variation
Big data: analytics predicts what MIGHT happen (not will happen); not bias-free

MJ24 — Mar/Jun 2024

Key errors and focus areas

Relevant cost of materials: find cheapest way to obtain required amount — may combine options (convert existing + buy additional)
Learning curve incremental batch: use formula for cumulative average at n and n−1 batches; incremental = total(n) − total(n−1)
Optimal pricing MR=MC: MR = a − 2bQ; set equal to variable cost; solve for Q; then find P from demand equation
Market skimming: suitable for short life-cycle, high development costs, currently unique product
Transfer pricing: spare capacity → variable cost; full capacity → market price (opportunity cost)
VFM economy: focus on MONETARY input costs (staff cost %; food cost per meal)
Information security: apply to the scenario — non-networked computers need physical security (lockable cabinet) + confidentiality contracts, NOT firewalls

D23 — Sep/Dec 2023

Key errors and focus areas

CVP assumptions: contribution per unit CONSTANT; all costs fixed or variable — NOT short-term limitation; fixed cost per unit falls but TOTAL fixed cost constant
Sales quantity variance: (actual qty in standard mix − standard qty in standard mix) × standard margin
Operating gearing: use figures to verify — contribution/operating profit × 100
ABC: only overhead costs benefit from ABC (not direct costs already attributed to products)
Environmental costs via ABC: supervisor salary and training costs can have identifiable cost drivers — normal material losses and direct wages already attributed directly
TOC: buffer stock BEFORE bottleneck; non-bottleneck resources operate at SAME speed as bottleneck; conversion costs kept MINIMUM

MJ23 — Mar/Jun 2023

Key errors and focus areas

Shadow price: it is the PREMIUM over normal price (NOT the total price); resources at optimum solution have shadow price > zero
Standard full cost: all variable + fixed costs; fixed overhead = total fixed ÷ budgeted units
Transfer pricing: with spare capacity → variable cost only; at full capacity → market price (to reflect opportunity cost)
TOC: buffer inventory held BEFORE bottleneck; operations before bottleneck run at SAME speed as bottleneck
Multi-product CVP with changing mix: identify new weighted average C/S ratio for each year; find BEP from new ratio
ABC cost driver matching: apply business knowledge (procurement → purchase orders; maintenance → machine hours)

Key Formula Reference

Throughput Accounting

TPAR = Throughput per bottleneck hr / Factory cost per bottleneck hr

Throughput = Selling price − Direct materials

Factory cost = ALL costs except materials (labour + variable + fixed overheads). Rank products by TPAR — highest first.

Target Costing

Target cost = Selling price − Target profit

Cost gap = Current cost − Target cost

Target profit = HIGHER of (mark-up method) and (ROI method). D25 trap: always take the higher figure.

CVP Analysis

C/S ratio = Contribution / Sales revenue

BEP (revenue) = Fixed costs / C/S ratio

MOS% = (Budget sales − BEP) / Budget sales × 100

Multi-product: use weighted average C/S ratio. MJ25: BEP rises by same % as fixed cost. C/S ratio falls by more than % of price cut.

Optimal Pricing (MR = MC)

P = a − bQ; MR = a − 2bQ

b = change in price / change in quantity

Set MR = MC (variable cost), solve for Q, substitute back to find P

ROI and Residual Income

ROI = Operating profit / Capital employed × 100%

RI = Operating profit − (Capital employed × Cost of capital)

RI: use PRE-TAX operating profit; use DIVISIONAL cost of capital (not company average). MJ25 trap.

Transfer Pricing

Min TP = Variable cost + Opportunity cost

With spare capacity: Min TP = variable cost

At full capacity: Min TP = variable cost + (market price − variable cost)

Opportunity cost = contribution lost on external sales displaced.

Variances — Mix & Quantity

Sales qty variance = (Actual qty in std mix − Std qty) × Std margin

Sales mix variance = (Actual mix − Std mix of actual total) × Std margin

D23: standard quantity = actual total quantity in standard proportions. Express as favourable or adverse.

Learning Curve

Y = aX^b (cumulative average time per unit)

Incremental time for nth batch = Total time for n batches − Total time for (n−1) batches

Learning rate: if batches 1 and 2 known, r = avg(2)/avg(1). MJ24: use formula for 7 batches then 8 batches to isolate 8th batch time.

Shadow Price (Dual Price)

Shadow price = Additional contribution per extra unit of scarce resource

MJ23 trap: shadow price = PREMIUM above normal price, not total price. A resource at optimum solution has shadow price > 0. A non-scarce resource has shadow price = 0.

Relevant Cost — Materials

In inventory, not replaceable: opportunity cost (scrap/resale/alternative use)

In inventory, will be replaced: replacement cost

Not in inventory: purchase price

MJ24: if material can be obtained in multiple ways, use the cheapest combination for the required quantity.

Life-Cycle Costing

Total life-cycle cost = Development + Total fixed + Total variable

Cost per unit = Total life-cycle cost / Total units over full life

Price = Cost per unit + Target profit per unit

SD24: must include ALL phases (introduction through decline) in total unit count.

ABC Cost Driver Rate

Cost driver rate = Total cost of activity pool / Total cost driver units

Cost per unit = Σ(cost driver rate × driver units per unit)

Number of batches = total units / batch size. Set-ups per product = batches × set-ups per batch.

Section C Strategy

Always in Section C — Performance Measurement (Section E)

One Section C question is always from Section E — Performance Measurement and Control. Expect one of: Balanced Scorecard with calculations and discussion; ROI and RI with transfer pricing analysis; NFP VFM with 3Es; divisional performance comparison. Use the spreadsheet tool. Always calculate BOTH years’ ratios and explain changes in context of the scenario.

Activity-Based Budgeting (ABB) — builds budget from ABC cost drivers and activity demand. Feed-forward control — proactive control using forecasts to prevent deviations before they occur (contrast with feedback/variance analysis which is reactive).

The other Section C question comes from Decision-Making (C) and/or Budgeting (D). Common combinations: relevant costing shutdown decision + discussion; CVP with multi-product + feasibility; planning and operational variances + performance analysis; standard costing flexed budget. May include data analytics or sustainability elements.

Priority	Topic	Typical marks and format	Key watch-out
★★★	CVP Analysis (C2)	Section C or B — C/S ratio, BEP, MOS, multi-product, target profit discussion	Use weighted avg C/S ratio for multi-product; express MOS as %; feasibility requires scenario discussion
★★★	Performance Measurement (E1)	Section C — calculate FPIs/NFPIs, BSC, interpret changes	Calculate ratios for BOTH years; interpret in context of scenario; explain why a balanced mix matters
★★★	Throughput Accounting (B4)	Section B case — TPAR, bottleneck, ranking, TOC	Bottleneck = lowest max output (capacity/time); rank by throughput per bottleneck hr; factory cost excludes advertising
★★★	Relevant Costing (C1)	Section B or C — materials, machines, shutdown, make-or-buy	Machine relevant cost = highest alternative use; materials: check whether in stock, replaceable, alternative use
★★	Optimal Pricing (C4)	Section A or B — MR=MC, demand function, pricing strategies	b = ΔP/ΔQ; MR = a−2bQ; set MR=MC (not set P=MC)
★★	Target Costing (B2)	Section A or B — target cost, cost gap, services	Target profit = higher of two methods; services heterogeneous; feed-forward control
★★	ROI and RI (E2)	Section B or C — divisional performance, transfer pricing	RI: pre-tax profit; divisional (not group) cost of capital; min TP = variable cost + opportunity cost
★★	Sales Variances (D5/D6)	Section A or B — mix, quantity, planning, operational	Sales qty variance uses standard mix of actual total quantity; planning/operational split requires revised budget
★★	NFP Performance (E3)	Section C (E question) — 3Es, VFM, multiple objectives	Definitions must be complete; application to scenario required; explain WHY balanced mix important
★★	ABC (B1)	Section B or A — cost drivers, rates, cost per unit	Total batches = units/batch size; multiply set-ups per batch by number of batches for total set-ups

Final 24 Hours — Cram View

If you only have time for the ★★★ topics, focus here:

CVP Analysis (C2): weighted average C/S ratio, BEP, MOS, target profit.
Performance Measurement (E1): FPIs/NFPIs both years, Balanced Scorecard, Building Block model.
Throughput Accounting (B4): bottleneck = lowest max output; rank by throughput per bottleneck hour.
Relevant Costing (C1): machine relevant cost = highest alternative use; check material status (in stock/replaceable).

Then, if time remains:

Re-read the Top 20 Traps list once more
Skim the Key Formula Reference for anything you’re still unsure of
Check the Command Word Glossary so you don’t lose marks misreading a requirement

Study Route

Start with Section B topics (B1–B4) — ABC, target costing, life-cycle costing, throughput accounting. Consistently tested in Section B cases with full 5-question scenarios.
Master Section C core topics — CVP (C2), Relevant costing (C1), Pricing (C4), Performance measurement (E1/E2/E3). Two 20-mark questions demand depth and application.
Build variance calculation fluency — D2 (learning curves, time series), D4 (mix/yield), D5 (mix/quantity), D6 (planning/operational). High calculation content; errors cascade.
Don’t neglect Section A breadth — big data pyramid (A3), budgetary systems (D1), risk and uncertainty (C6), behavioural aspects (D7). Small topics tested as standalone OT questions.
Exam technique — read rounding instructions carefully (D25: 3 d.p.; MJ25: 1 d.p.). Use spreadsheet functionality in Section C. Show workings even for partial credit. Always apply discussion to the scenario, not generically.

Quick Reference Cards

Final 48-hour condensed reference · All key formulas, variances, and exam traps in one scan

Costing Methods

ABC — cost driver rate= Total activity cost / Total cost driver units

Target cost= Target price − Target profit marginCost gap = Current cost − Target cost → must be closed

Throughput contribution= Sales revenue − Direct material cost

TPAR= Throughput per bottleneck hour / Operating cost per bottleneck hourTPAR > 1 = accept; < 1 = review/reject

ABC: assign costs to activities → cost pools → products using drivers. Not the same as absorption costing.

Throughput: only variable cost = materials. All labour and overhead = fixed operating costs.

Relevant Costs & Decision-making

Include: future, incremental, cash flows — opportunity costs

Exclude: sunk costs, committed costs, apportioned overheads, non-cash (depreciation)

Material in use (relevant cost)= Replacement cost (if will be replaced) or NRV (if surplus) or opportunity cost

Labour (relevant cost)= Idle/spare capacity (workers paid anyway): £0. Overtime: premium only. Diverted from other work: basic wage + contribution foregone

Make vs BuyBuy if external price < marginal cost of making (+ opportunity cost if capacity constrained)

Apportioned head office costs are never relevant — they exist regardless of the decision

Contribution foregone = opportunity cost of using a resource that has another use

CVP Analysis

Contribution= Sales − Variable costs

BEP (units)= Fixed costs / Contribution per unit

BEP (revenue)= Fixed costs / C/S ratio

C/S ratio= Contribution / Sales × 100%

Margin of safety= (Budgeted sales − BEP) / Budgeted sales × 100%

Target profit volume= (Fixed costs + Target profit) / Contribution per unit

C/S ratio is constant per unit; use for revenue-based BEP and mixed CVP problems

Limiting Factors & Linear Programming

Ranking (single constraint)= Contribution per unit of scarce resourceRank highest to lowest; produce in order until resource exhausted

Shadow price= Increase in contribution per additional unit of the scarce resource

Shadow price = how much to pay ABOVE normal price for extra units of the scarce resource

LP: identify constraints → plot lines → shade feasible region → test corner points for maximum contribution

Iso-contribution line: parallel lines; move away from origin to find optimum corner point

Slack= Unused resource at optimum (non-binding constraint)

Standard Costing — Core Variances

Material price variance= (SP − AP) × AQ purchased

Material usage variance= (SQ for actual output − AQ used) × SP

Labour rate variance= (SR − AR) × AH worked

Labour efficiency variance= (SH for actual output − AH worked) × SR

Fixed OH expenditure= Budgeted FOH − Actual FOH

Fixed OH volume= (Actual output − Budgeted output) × Std FOH rate

Sales price variance = (AP − SP) × Actual quantity sold

Sales volume variance = (Actual units − Budget units) × Standard contribution (marginal) or profit (absorption)

Mix, Yield & Sales Mix Variances

WASP (material)= Total std cost of std mix / Total std qty in std mix

Material mix variance (per material)= (Std proportion of actual total − Actual qty) × SP

Yield variance= (Actual yield − Std yield from actual input) × WASP

WASC (sales)= Total budgeted contribution / Total budgeted units

Sales mix variance (per product)= (Actual units − Std mix of actual total) × Std contribution

Sales quantity variance (total)= (Total actual − Total budget) × WASC

Mix + Yield = Usage variance (check). Mix + Quantity = Volume variance (check).

Yield uses WASP not individual prices. Quantity uses WASC not individual contributions.

Planning & Operational Variances

Planning variance= (Original std − Revised std) × Actual qty/hrsUncontrollable — external environment or standard error

Operational variance= (Revised std − Actual) × Actual qty/hrsControllable — basis for manager performance appraisal

Check: Planning + Operational = Total variance

Revised (ex-post) standard should be set independently, using objective external data — not by the manager being assessed

Adverse planning variance = original standard was too optimistic

ROI, RI & Transfer Pricing

ROI= Operating profit / Capital employed × 100%

Residual Income (RI)= Pre-tax operating profit − (CE × Divisional CoC)

RI advantage: better goal congruence — accept any project with RI > 0

ROI disadvantage: rejects positive-NPV projects that dilute divisional ROI

TP — spare capacityMinimum TP = Variable cost (no opportunity cost)

TP — full capacityMinimum TP = Market price = VC + (MP − VC)

Group profit is unaffected by the transfer price itself — it only redistributes profit between the two divisions.

Performance Measurement

BSC 4 perspectives: Financial → Customer → Internal Process → Learning & Growth

Strategy map direction: L&G → Process → Customer → Financial (cause → effect)

Building Block (Fitzgerald & Moon) — for services:

ResultsCompetitiveness + Financial

DeterminantsQuality, Flexibility, Resource utilisation, Innovation

StandardsOwnership, Achievability, Equity

RewardsClarity, Motivation, Controllability

NFP — Three EsEconomy (input cost quality); Efficiency (output/input); Effectiveness (outcomes vs objectives)

Economy = appropriate quality at minimum cost — quality qualifier required (MJ25)

C5 — Make-or-Buy & Short-Term Decisions

Make-or-Buy (No Limiting Factor)

Buy if: relevant cost of buying < relevant cost of making

Relevant cost of making = variable costs + avoidable fixed costs only (NOT apportioned overhead)

Make-or-Buy (Limiting Factor)

Benefit from buying = relevant cost of making − buy-in price

Calculate benefit per unit of limiting factor released

Buy whichever gives highest benefit per unit of scarce resource

Shut Down Decision

Keep if: contribution lost > avoidable fixed cost savings

Close if: avoidable fixed cost savings > contribution lost

⚠ Accounting loss ≠ close. An accounting loss product may still make positive contribution.

Further Processing of Joint Products

Joint costs are SUNK — always irrelevant

Process further if: incremental revenue > incremental cost of further processing

Only compare: additional revenue vs additional cost of further processing

C6 — Risk and Uncertainty in Decision-Making

Expected Value

EV = Σ (probability × outcome)

Choose highest EV (maximising) or lowest EV (minimising cost)

Limitation: only meaningful for repeated decisions — a single one-off outcome will not equal the EV

Maximax / Maximin / Minimax Regret

Maximax (optimist): choose highest possible payoff — ignores downside

Maximin (pessimist): choose option with best worst-case outcome

Minimax Regret: (1) Build regret table: best payoff in each state − each option’s payoff. (2) Find max regret per option. (3) Choose option with lowest maximum regret.

Value of Perfect Information (VPI)

VPI = EV with perfect info − EV without

EV with perfect info: in each state, assume optimal decision is made → weight by probability

VPI = maximum to pay for any market research / information system

Decision Trees — Roll-Back Method

Squares = decision points; Circles = chance nodes

Roll back RIGHT to LEFT: at circles, calculate EV; at squares, choose best branch (cross off others)

Always show workings at every node

Sensitivity Analysis

Sensitivity % = NPV ÷ PV of relevant cash flow × 100

Lower % = more sensitive = more critical assumption

Limitation: one variable at a time; no probabilities given

D1 — Additional Budgeting Topics

Activity-Based Budgeting (ABB)

Build budget from ABC activities and cost drivers — not historical spending

Advantages: transparent link between output and cost; highlights inefficient activities

Disadvantages: complex; requires existing ABC model

Feed-Forward Control

Proactive control using forecasts to prevent deviations BEFORE they occur

vs Feedback control (variance analysis): reactive — deviation has already occurred

Enabled by rolling budgets and rolling forecasts

Difficulties Changing Budget System (D1i)

Behavioural resistance · Loss of historical comparability · Systems/data infrastructure needed · Staff retraining · Implementation cost and time

Budgeting Under Uncertainty (D1j)

Rolling forecasts · Scenario planning (optimistic/base/pessimistic) · Flexible budgets · Sensitivity analysis · Relative performance targets

↑

Back to Course

Next Lesson

Exam Structure

Timing & Pacing Guide

Complete Topic Map

Real Exam Questions — All 14 Mock Section C Questions

Top 20 Traps — Most Repeated Examiner Errors

Command Word Glossary

Examiner Intelligence — All 7 Sittings (SD22–SD25)

Key errors and focus areas

Key errors and focus areas

Key errors and focus areas

Key errors and focus areas

Key errors and focus areas

Key errors and focus areas

Key errors and focus areas

Key Formula Reference

Section C Strategy

Final 24 Hours — Cram View

If you only have time for the ★★★ topics, focus here:

Then, if time remains:

Study Route

Quick Reference Cards

C5 — Make-or-Buy & Short-Term Decisions

Make-or-Buy (No Limiting Factor)

Make-or-Buy (Limiting Factor)

Shut Down Decision

Further Processing of Joint Products

C6 — Risk and Uncertainty in Decision-Making

Expected Value

Maximax / Maximin / Minimax Regret

Value of Perfect Information (VPI)

Decision Trees — Roll-Back Method

Sensitivity Analysis

D1 — Additional Budgeting Topics

Activity-Based Budgeting (ABB)

Feed-Forward Control

Difficulties Changing Budget System (D1i)

Budgeting Under Uncertainty (D1j)

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