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 in September 2016, December 2016, March 2017 and June 2017 and contains: • Banks of questions on every syllabus area • Answers with detailed guidance on approaching  questions • Three mock exams with full answers and guidance 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 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 February 2016 £18.00 ACP5RK16 (RICOH).indd 1-3 For exams in September 2016, December 2016, March 2017 and June 2017 Contact us Paper P5 Advanced Performance Management For exams in September 2016, December 2016, March 2017 and June 2017 Free access to our Exam Success site Look inside 17/02/2016 11:08 ACCA APPROVED CONTENT PROVIDER As the first accredited publisher of ACCA materials, BPP Learning Media has set the benchmark for producing exceptional study materials for students and tutors alike Our Study Texts, Practice & Revision Kits and i-Passes (for exams on demand) are reviewed by the ACCA examining team and are written by our in-house authors with industry and teaching experience who understand what is required for exam success EXAM SUCCESS SITE To help maximise your chances of succeeding in your exams, we’ve put together a suite of exclusive ACCA resources Our Exam Success site provides you with access to a free digital version of this publication, as well as extra resources designed to focus your efforts on exams and study methods To access the Exam Success site, please email learningmedia@bpp.com with the subject line “Access to Exam Success site - eBook”, including your order reference number and the name of the book you’ve bought (ie ACCA F5 Study Text) for your access code Once you have received your code, please follow the instructions below: To access the BPP ACCA Exam Success site for this material please go to: www.bpp.com/ExamSuccessSite n Create a user account if you don’t already have one Make sure you reply to the confirmation email n Log in using your registered username and password Select the paper you wish to access n Enter the code you received when prompted You will only have to this once for each paper you are studying PAPER P5 ADVANCED PERFORMANCE MANAGEMENT BPP Learning Media is an ACCA Approved Content Provider for the ACCA qualification This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams In this Practice & Revision Kit, which has been reviewed by the ACCA 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  Provide ACCA exam answers as well as our own for selected questions Our Passcards also support this paper FOR EXAMS IN SEPTEMBER 2016, DECEMBER 2016, MARCH 2017 AND JUNE 2017 P R A C T I C E & R E V I S I O N K I T First edition 2007 Tenth edition February 2016 ISBN 9781 4727 4446 (previous ISBN 9781 4727 2696 ) e-ISBN 9781 4727 4661 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 Printed in the United Kingdom by Ricoh UK Limited Unit Wells Place Merstham RH1 3LG Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable, sustainable sources All 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 The contents of this book are intended as a guide and not professional advice Although every effort has been made to ensure that the contents of this book are correct at the time of going to press, BPP Learning Media makes no warranty that the information in this book is accurate or complete and accept no liability for any loss or damage suffered by any person acting or refraining from acting as a result of the material in this book 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, unless otherwise stated © BPP Learning Media Ltd 2016 ii 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, ripcasting or conversion of our digital materials into different file formats, uploading them to facebook or e-mailing 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 secondhand 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? Contents Page Finding questions Question index iv Topic index .vii Helping you with your revision ix Revising P5 Topics to revise .x Question practice x Passing the P5 exam xi Exam formulae xvi Exam information xviii Analysis of past papers xix Useful websites xxi Questions and answers Questions Answers 109 Exam practice Mock exam  Questions 409  Plan of attack .417  Answers .419 Mock exam  Questions 439  Plan of attack .447  Answers .449 Mock exam (ACCA September/December 2015 Exam)  Questions 471  Plan of attack .483  Answers .486 Review form iii 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 Past exam questions are designated with 'APM' after the question name, along with the date of the exam in which they featured Time Page number Marks allocation (Mins) Question Answer Part A: Strategic planning and control AB Electronics 25 49 109 Megasnack 25 49 111 Ganymede (APM 6/12, amended) 25 49 114 Wheeler 25 49 119 BPL Leisure 25 49 122 Mentons 25 49 124 CFD (APM 12/09, amended) 25 49 128 ZTC Communications 25 49 130 Stayzee Hotels 25 49 134 10 Drinks Group (APM 12/12, amended) 25 49 11 136 11 Godel (APM 6/14, amended) 25 49 12 141 12 Booxe (APM 6/14) 25 49 14 145 13 Business process re-engineering 25 49 15 149 14 BV Entertainments 25 49 15 151 15 EEE Chemical company 25 49 16 154 16 PLX Refinery (APM Pilot Paper, amended) 25 49 17 156 17 GHG (APM 6/08, amended) 25 49 19 160 18 CAP (APM 12/09, amended) 25 49 19 162 19 FGH Telecom (APM 12/10, amended) 25 49 21 165 20 Stokeness (APM 6/13) 25 49 22 169 Part B: External influences on organisational performance iv Question index Time Page number Marks allocation (Mins) Question Answer 21 Handra 25 49 23 173 22 TREN engine components 25 49 24 175 23 KLP divisions 25 49 24 178 24 Racer deliveries 25 49 25 180 25 Forion Electronics (APM 6/15) 25 49 26 182 26 Quark Healthcare (APM 12/13) 25 49 27 186 27 Bluefin School (APM 12/11, amended) 25 49 28 190 28 Great National Trains 25 49 30 193 29 Amal (APM 6/12, amended) 25 49 31 198 30 NCL 25 49 33 201 31 Landual Lamps (APM 6/13) 25 49 34 204 32 Alpha Division (APM 12/07) 25 49 35 209 33 Stillwater Services (APM 12/12, amended) 25 49 37 213 34 Seatown 25 49 39 218 35 Essland Police Forces (APM 12/13) 25 49 39 220 36 Beeshire Local Authority (APM 12/14) 25 49 41 224 37 CFE coffee shops 25 49 42 227 38 Herman Swan & Co (APM 12/12, amended) 25 49 43 230 39 Navier Aerials (APM 6/13) 25 49 44 235 40 TAW (APM 6/08, amended) 25 49 46 239 41 Thebe (APM 6/12, amended) 25 49 47 241 42 There U (APM 6/09, amended) 25 49 48 245 43 SSH (APM 12/08) 25 49 49 247 44 Albacore (APM Pilot Paper) 25 49 50 250 45 Elegant Hotels 25 49 52 254 46 Equiguard 25 49 53 257 47 ENT Entertainments (APM 6/11, amended) 25 49 54 259 48 Beach Foods (APM 6/15) 25 49 55 262 Part C: Performance measurement systems and design Part D: Strategic performance measurement Question index v Part E: Performance evaluation and corporate failure 49 Pharmaceutical Technologies (APM Pilot Paper) 25 49 57 266 50 Victoria-Yeeland logistics (APM 6/15) 25 49 58 270 51 Graviton (APM 12/13) 25 49 60 273 52 Bettaserve 25 49 61 278 53 Cod (APM 12/11, amended) 25 49 62 280 54 APX Accountancy (APM 6/11, amended) 25 49 63 284 55 Robust Laptops (APM 12/10, amended) 25 49 64 287 56 SFS (APM 6/10, amended) 25 49 66 290 57 LOL cards (APM 12/10, amended) 25 49 67 292 58 BEG (APM 6/10, amended) 25 49 68 295 59 Turing (APM 6/14) 25 49 69 298 60 Callisto (APM 6/12, amended) 25 49 70 302 61 Coal Creek (APM 12/12, amended) 25 49 71 305 62 BPC (APM 12/07, amended) 25 49 73 311 63 RM Batteries (APM 12/10, amended) 25 49 73 313 64 NW Clothes 25 49 75 316 65 Culam Mining (APM 12/14) 25 49 76 318 66 Lopten (APM 12/13, amended) 50 98 78 322 67 Film Productions Co (APM 12/10, amended) 50 98 80 329 68 Mackerel (APM Pilot Paper) 50 98 81 333 69 TSC (APM 12/08, amended) 50 98 83 342 70 Lincoln & Lincoln (APM 12/12, amended) 50 98 85 347 71 BEC (APM 12/09, amended) 50 98 89 355 72 HFG (APM 6/08, amended) 50 98 92 361 73 SBC (APM 6/10, amended) 50 98 94 368 74 Kolmog Hotels (APM 6/13) 50 98 95 373 75 Cantor (APM 6/14) 50 98 97 380 76 Boltzman Machines (APM 12/14, amended) 50 98 99 390 77 Merkland Sportswear (APM 6/15) 50 98 102 396 50 mark (Section A) Questions Mock exam Mock exam Mock exam (ACCA September/December 2015 Exam) Important note: Questions and in Mock exam are past exam questions from June 2012 and December 2011 respectively Even if you not attempt the full Mock exam, you are strongly encouraged to complete these two questions as part of your revision vi Question index 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 23, 44 Activity-based costing 39, 55 Activity-based management 56 Appraisals and performance management 12(c) Balanced scorecard 49, 50, 73, 74, 76(d), Mock Qn Benchmarking 3, 76(b), Mock Qn BCG matrix 5(d), 47 Big Data 29 Branding 37(a), 38(c) Budgeting and types of budget 10, 11, Mock Qn Building blocks model (Fitzgerald and Moon) 54, 74 Business process re-engineering (BPR) 12, 13 Business structure (and performance measurement) 60 Controls and security over information 27 Corporate failure 61 – 65 Costs of quality 39, 40, Mock Qn Critical success factors (CSFs) 7, 8, 55(b), 66, 67, Mock Qn Divisional performance measures 70, Mock Qn TM Economic value added (EVA ) 32, 33, 48, 57, 72, 75(iii), Mock Qn Environmental management accounting 16 Enterprise resource planning systems (ERPS) 25, Mock Qn 1(iv) External environment (and impact on organisations) 8, 17, 18, 19, 66 Financial performance 18, 32, 43, 69-72, Mock Qn 1, Mock Qn Five forces (Porter) 8, 20, 62 Goal congruence 2, 9, 30 Information for decision making 1, , 21, 66 Information overload 27, 70 Information systems and IT systems 14, 68, Mock Qn 2, Mock Qn Integrated Reporting 28 JIT 76 (c), Mock Qn 2, Mock Qn (iii; iv) Joint ventures 59, Mock Qn Kaizen costing 4(d), 40(c), 56(c), Mock Qn 2, Mock Qn 1(iii; iv) Key performance indicators (KPIs) 7, 9, 53, 55(b), 66, 67, Mock Qn League tables 3, 35, 69, Mock Qn Lean information systems 22, 26 Topic index vii viii Syllabus topic Question numbers Management accounting and information systems 14, 21, 68, Mock Qn Management and control styles 44(b), 48(c) Mission statements 7, 53(a), 67, 75(v) Net present value 18 Non-financial performance indicators 7, 36, 41(a), 73 Objectives 9, 55(b) Performance management in complex business structures 59, 60, Mock Qn Performance management information systems 21, 22, 23, Mock Qn Performance pyramid (Lynch & Cross) 51, 52, 53, 58, Mock Qn Performance reports 27, 75, Mock Qn Problems of performance measurement 51, Mock Qn Public sector organisations 28(a), 34, 35, 36 Qualitative information 24, 36 Quality 39(b), 41, Mock Qn Residual income 30, 32, 72 Responsibility and controllability 23, 26(c), 44 Reward and remuneration schemes 44, 45, 46, 47, 50(c), 70-74 RFID technology 26, Mock Qn Risk and uncertainty 1, 59, 68, 77(iii) Role of management accountants 5, 6, 38, 69(c) Service organisations 14, 54, 74 Short vs long-term decision making 2, 9, Mock Qn Six Sigma 41, 42, 45, Mock Qn Social obligations 19, 37 Stakeholders 15, 33, 49(b), 68, 76 Strategic management accounting 1, 17(c) Strategic planning SWOT analysis 77 Target costing 56 Total quality management (TQM) Mock Qn 2, Mock Qn 1(iii; iv) Transfer pricing 31, Mock Qn Value based management 57, 75(iv) Value chain 77(v) Value for money 36(b) Virtual organisations 60 Topic index Notes Notes Notes Notes Notes Notes Notes Notes Notes Notes Notes Notes Notes Review Form – Paper P5 Advanced Performance Management (02/16) Name: Address: During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) How have you used this Kit? (Tick one box only) On its own (book only) On a BPP in-centre course Our advertisement in Student Accountant On a BPP online course Our advertisement in Pass On a course with another college Our advertisement in PQ Other Our brochure with a letter through the post Our website www.bpp.com Why did you decide to purchase this Kit? (Tick one box only) 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 Prices and publication dates of new editions Recommendation by friend/colleague Information on product content Recommendation by a lecturer at college Facility to order books Saw advertising None of the above Other Which BPP products have you used? Text Passcards Kit i-Pass Other 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 emailed at: accaqueries@bpp.com Please return this form to: Head of ACCA & FIA Programmes, 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 ... prior to 2013 are available on ACCA' s website: www.accaglobal.com/gb/en/student /acca- qual-student-journey/qual-resource /acca- qualification /p5/ past-exampapers.html Please note, these questions reflect... are studying PAPER P5 ADVANCED PERFORMANCE MANAGEMENT BPP Learning Media is an ACCA Approved Content Provider for the ACCA qualification This means we work closely with ACCA to ensure our products... strategic performance measures in the private sector 10 Divisional performance and transfer pricing issues 11 Scope of strategic performance measures in not-forprofit organisations 12 Non-financial performance