BPP House 142-144 Uxbridge Road London W12 8AA United Kingdom T 0845 075 1100 (UK) T +44 (0)20 8740 2211 (Overseas) E Learningmedia@bpp.com bpp.com/learningmedia • Banks of questions on every syllabus area • Answers with detailed guidance on approaching  questions • Three mock exams with full answers and guidance For exams up to June 2015 Contact us One of a suite of products supporting Paper P5 Advanced Performance Management, for use independently or as part of a package, this Kit is targeted at ACCA’s exams up to June 2015 and contains: Practice & Revision Kit Paper P5 Advanced Performance Management This Kit provides material specifically for the practice and revision stage of your studies for Paper P5 Advanced Performance Management that has been comprehensively reviewed by the ACCA examining team This unique review ensures that the questions, solutions and guidance provide the best and most effective resource for practising and revising for the exam Advanced Performance Management BPP Learning Media is dedicated to supporting aspiring business professionals with top-quality learning material as they study for demanding professional exams, often whilst working full time BPP Learning Media’s commitment to student success is shown by our record of quality, innovation and market leadership in paper-based and e-learning materials BPP Learning Media’s study materials are written by professionally qualified specialists who know from personal experience the importance of top-quality materials for exam success ACCA P5 ACCA approved content provider ACCA APPROVED CONTENT PROVIDER ACCA Approved Practice & Revision Kit Paper P5 Advanced Performance Management Practice & Revision Kit for exams up to June 2015 Free access to our Exam Success site Look inside June 2014 £18.00 ACP5RK14.indd 1-3 30/05/2014 15:37 PAPER P5 ADVANCED PERFORMANCE MANAGEMENT BPP Learning Media is an ACCA Approved Learning Partner – content for ACCA qualifications This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams In this Practice and Revision Kit, which has been reviewed by ACCA’s examination team, we:  Discuss the best strategies for revising and taking your ACCA exams  Ensure you are well prepared for your exam  Provide you with lots of great guidance on tackling questions  Provide you with three mock exams including the Pilot Paper  Provide ACCA’s exam answers as well as our own for selected questions Our Passcard and i-Pass products also support this paper FOR EXAMS UP TO JUNE 2015 P R A C T I C E & R E V I S I O N K I T First edition 2007 Eighth edition June 2014 ISBN 9781 4727 1111 (previous ISBN 9781 4453 6655 5) e-ISBN 9781 4727 1175 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www.bpp.com/learningmedia All our rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated Printed in the United Kingdom by Polestar Wheatons Hennock Road Marsh Barton Exeter EX2 8RP Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable, sustainable sources ii © BPP Learning Media Ltd 2014 Contents Page Finding questions Question index v Topic index ix Helping you with your revision xi Revising P5 Topics to revise & Question practice .xii Passing the P5 exam xiii Exam formulae xviii Exam information xx Analysis of past papers xxi Useful websites xxiii Questions and answers Questions Answers 131 Exam practice Mock exam  Questions 487  Plan of attack .497  Answers .499 Mock exam (Pilot paper)  Questions 519  Plan of attack .527  Answers .529 Mock exam (December 2013)  Questions 551  Plan of attack .559  Answers .561 ACCA’s exam answers  June 2013 583  December 2013 591 Review form iii A note about copyright Dear Customer What does the little © mean and why does it matter? Your market-leading BPP books, course materials and e-learning materials not write and update themselves People write them: on their own behalf or as employees of an organisation that invests in this activity Copyright law protects their livelihoods It does so by creating rights over the use of the content Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media:  Photocopying our materials is a breach of copyright  Scanning, rip-casting or conversion of our digital materials into different file formats, uploading them to Facebook or emailing them to your friends is a breach of copyright You can, of course, sell your books, in the form in which you have bought them – once you have finished with them (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single user licence basis: we not supply ‘unlock’ codes to people who have bought them second-hand And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that If they act illegally and unethically in one area, can you really trust them? iv Finding questions Question index The headings in this checklist/index indicate the main topics of questions, but questions often cover several different topics Where necessary, questions have been amended to reflect the new format of the exam, from June 2013 Questions set under the old syllabus Performance Management paper are included because their style and content are similar to those which appear in the P5 exam They have 'PM' after the question name These questions have been amended to reflect the current exam format Questions taken from the P3 Business Analysis syllabus (when a re-alignment of syllabuses took place in 2010) are denoted by ‘BA' after the question name Exam questions set under the current syllabus are designated 'APM' after the question name Time Page number Marks allocation (Mins) Question Answer Part A: Strategic planning and control Diverse holdings (PM 12/05, amended) 25 45 131 ST University 25 45 133 HEG (APM 12/07, amended) 25 45 137 AB Electronics 25 45 140 Megasnack 25 45 142 Ganymede (APM 6/12, amended) 25 45 145 Drinks Group (APM 12/12, amended) 25 45 150 Business process re-engineering 25 45 10 155 GMB Co (APM 12/07, amended) 25 45 11 157 10 Sports Shop 25 45 12 161 11 Scott 25 45 13 163 12 MKO Clothing 25 45 13 166 13 BV Entertainments 25 45 14 168 14 EEE Chemical company 25 45 15 170 15 GSC groceries 25 45 16 172 16 GTR panels 25 45 17 175 17 GHG (APM 6/08, amended) 25 45 18 177 18 F4U (APM 6/09) 25 45 18 179 19 CAP (APM 12/09, amended) 25 45 19 182 20 FGH Telecom (APM 12/10, amended) 25 45 21 186 21 SQR Sports racquets 25 45 22 189 22 Stokeness (APM 6/13) 25 45 23 192 Part B: External influences on organisational performance Finding questions v Time Page number Marks allocation (Mins) Question Answer 23 Handra 25 45 24 197 24 FDS irrigation systems 25 45 25 199 25 TREN engine components 25 45 26 201 26 KLP divisions 25 45 26 203 27 Racer deliveries 25 45 27 206 28 Auto Parts 25 45 28 208 29 CMA Supermarkets 25 45 29 210 30 Viga Drinks (Preparation question) 20 36 30 212 31 Beachy Co 25 45 30 214 32 Cobra Golf Club (Preparation question) 20 36 31 217 33 Bluefin School (APM 12/11, amended) 25 45 33 218 34 CFD (APM 12/09, amended) 25 45 35 221 35 ZTC Communications 25 45 35 224 36 Stayzee Hotels 25 45 36 227 37 CSG (PM 6/07, amended) 25 45 37 230 38 SEC 25 45 38 233 39 Landual Lamps (APM 6/13) 25 45 39 235 40 Alpha Division (APM 12/07) 25 45 40 240 41 Stillwater Services (APM 12/12, amended) 25 45 42 244 42 BAG (APM 12/08, Preparation question) 20 36 44 249 43 SSA (APM 12/09, amended) 25 45 45 251 44 Seatown 25 45 46 255 45 LGHD (APM 6/10, amended) 25 45 47 258 46 CFE coffee shops 25 45 47 260 47 JIT systems (Preparation question) 20 36 48 262 48 Tench (APM 12/11, amended) 25 45 49 265 49 Navier Aerials (APM 6/13) 25 45 50 268 50 TAW (APM 6/08, amended) 25 45 51 272 51 Thebe (APM 6/12, amended) 25 45 53 274 52 There U (APM 6/09, amended) 25 45 54 278 53 SSH (APM 12/08) 25 45 55 280 54 Universal Pottery Company (BA 12/07) 25 45 56 283 55 CCT Computer Systems (Preparation question) 12 22 57 287 56 Astrodome (PM 12/05, amended) 25 45 58 289 57 TRG (APM 6/08, amended) 25 45 59 290 58 UU (APM 6/09, amended) 25 45 60 293 Part C: Performance measurement systems and design Part D: Strategic performance measurement vi Finding questions Time Page number Marks allocation (Mins) Question Answer 59 Elegant Hotels (BA 6/09) 25 45 61 295 60 Connie Head 25 45 62 298 61 Equiguard (BA 12/08) 25 45 62 300 62 YCT yachts 25 45 64 303 63 Bettaserve (APM Pilot paper) 25 45 65 306 64 Cod (APM 12/11) 25 45 66 308 65 APX Accountancy (APM 6/11, amended) 25 45 68 312 66 Eatwell Restaurant (PM 6/02, amended) 25 45 69 315 67 Amal (APM 6/12, amended) 25 45 69 318 68 B2B Deliveries 25 45 70 322 69 Glitter Fashions 25 45 71 325 70 SFS (APM 6/10, amended) 25 45 72 327 71 LOL cards (APM 12/10, amended) 25 45 73 329 72 BEG (APM 6/10, amended) 25 45 74 331 73 XYZ Co 25 45 75 334 74 ENT Entertainments (APM 6/11, amended) 25 45 76 337 75 Vision (PM 12/06, amended) 25 45 77 340 76 TMC (APM 12/08, amended) 25 45 78 344 77 Joint venture 25 45 79 346 78 Callisto (APM 6/12, amended) 25 45 80 348 79 CHN Retail chain 25 45 81 352 80 Coal Creek (APM 12/12, amended) 25 45 82 354 81 BPC (APM 12/07, amended) 25 45 84 359 82 RM Batteries (APM 12/10, amended) 25 45 84 361 83 NW Clothes 25 45 86 364 84 Action Buttons 25 45 87 366 Part E: Performance evaluation and corporate failure Finding questions vii Time Page number Marks allocation (Mins) Question Answer 85 Environmental management accounting (Preparation question) 20 36 89 369 86 School League Tables 25 45 89 370 87 BPL Leisure 25 45 90 373 88 Mentons 25 45 91 375 89 Herman Swan & Co (APM 12/12, amended) 25 45 92 378 90 Great National Trains 25 45 93 384 91 Armstrong Stores (APM, Sample question, amended) 50 90 95 389 92 Robust Laptops (APM 12/10, amended) 50 90 97 394 93 RRR (APM 12/09, amended) 50 90 99 399 94 BWY houses 50 90 101 403 95 Film Productions Co (APM 12/10, amended) 50 90 103 410 96 Metis (APM 6/12, amended) 50 90 105 414 97 GWCC (PM 6/06, amended) 50 90 107 422 98 JHK Coffee Machines (APM 6/11, amended) 50 90 108 428 99 TSC (APM 12/08, amended) 50 90 110 434 100 BEC (APM 12/09, amended) 50 90 112 439 101 HFG (APM 6/08, amended) 50 90 115 446 102 SBC (APM 6/10, amended) 50 90 117 453 103 Kolmog Hotels (APM 6/13) 50 90 119 458 104 Glasburgh (APM 6/09, amended) 50 90 121 465 105 AAA Management Consultancy 50 90 123 473 106 Zed Leisure 50 90 124 477 Part F: Current developments and emerging issues in performance management Section A Questions Mock exam Mock exam (Pilot Paper) Mock exam (December 2013) viii Finding questions Topic index Listed below are the key Paper P5 syllabus topics and the numbers of the questions in this Kit covering those topics If you need to concentrate your practice and revision on certain topics or if you want to attempt all available questions that refer to a particular subject, you will find this index useful Syllabus topic Question numbers Accountability and responsibility accounting Activity-based costing Activity-based management Ansoff's growth vector matrix Appraisals and performance management 26, 58, Mock Qn 9, 49, 92 70 75, 76 60 Balanced scorecard Behavioural aspects of budgeting Benchmarking Beyond budgeting BCG matrix Branding Budgeting and types of budget Building blocks model (Fitzgerald and Moon) Business process re-engineering Business structure (and performance measurement) 62, 69, 91, 102-105, Mock Qn 57 6, 91, 98 92, 93 74, 87, 94 46 7, 92, 93 65, 66, 99 78 Controls and security over information Corporate failure Costs of quality Critical success factors Cultural differences 30, 31, 33 80-83, 106 42, 48-50, 97 3, 34, 35, 92, 95, Mock Qn 17 Dimensions of performance (Fitzgerald and Moon) Divisional performance measures 66 98, Mock Qn 1, Mock Qn Environmental factors and impact on performance Environmental management accounting Enterprise resource planning systems (ERPS) EVA (Economic value added) External environment 17, 19, 20, 21, 35, 94, Mock Qn 85, Mock Qn 3, 12 40, 41, 71, 101 17, 21, 35, 94 Financial performance Five forces 35, 37, 38, 40, 53, 96-101, 106, Mock Qn 21, 22, 35 Gap analysis Goal congruence Governments, regulation and business performance 75, 76, 91, Mock Qn 5, 36, Mock Qn 16, 41, 76 Information for decision making Information overload Information systems and IT systems Integrated Reporting 2, 4, 23, 24, Mock Qn 1, Mock Qn 32, 33, Mock Qn 2, 11, 12, 13, 29, Mock Qn 2, Mock Qn 90 JIT Joint ventures 47, 48 77 Finding questions ix 586 ACCA's exam answers: June 2013 exam ACCA's exam answers: June 2013 exam 587 588 ACCA's exam answers: June 2013 exam ACCA's exam answers: June 2013 exam 589 590 ACCA's exam answers: June 2013 exam December 2013 exam – ACCA’s exam answers Professional Level – Options Module, Paper P5 Advanced Performance Management ACCA's exam answers: December 2013 exam 591 592 ACCA's exam answers: December 2013 exam ACCA's exam answers: December 2013 exam 593 594 ACCA's exam answers: December 2013 exam ACCA's exam answers: December 2013 exam 595 596 ACCA's exam answers: December 2013 exam Notes Notes Review Form – Paper P5 Advanced Performance Management (06/14) Name: Address: How have you used this Kit? (Tick one box only) During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) Home study (book only) On a course: college Our advertisement in Student Accountant With 'correspondence' package Our advertisement in Pass Other Our advertisement in PQ Our brochure with a letter through the post Why did you decide to purchase this Kit? (Tick one box only) Our website www.bpp.com Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) Have used the complementary Study text Have used other BPP products in the past Recommendation by friend/colleague Prices and publication dates of new editions Recommendation by a lecturer at college Information on product content Saw advertising Facility to order books off-the-page Other None of the above Which BPP products have you used? Text Passcards Kit i-Pass Home Study Your ratings, comments and suggestions would be appreciated on the following areas Very useful Useful Not useful Good Adequate Poor Yes No Passing P5 Questions Top Tips etc in answers Content and structure of answers Mock exam answers Overall opinion of this Kit Excellent Do you intend to continue using BPP products? The BPP author of this edition can be e-mailed at: adrianthomas@bpp.com Please return this form to: Pippa Riley, ACCA Publishing Manager , BPP Learning Media Ltd, FREEPOST, London, W12 8AA Review Form (continued) TELL US WHAT YOU THINK Please note any further comments and suggestions/errors below ... knowledge to the scenario Revising P5 xvii Exam formulae xviii Revising P5 Revising P5 xix Exam information The exam paper Format of the paper The current format of the P5 exam was introduced in June... Revising P5 xxiii xxiv Revising P5 Questions STRATEGIC PLANNING AND CONTROL Questions to 15 cover strategic planning and control, the subject of Part A of the BPP Study Text for Paper P5 Diverse... for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www .bpp. com/learningmedia All our rights reserved No part of this publication