To develop knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for planning, decision-making, performance evaluation and control.

DETAILED SYLLABUS.

A. Specialist cost and management accounting techniques

• 1. Activity- based costing
• 2. Target costing
• 3. Lifecycle costing
• 4. Backflush accounting
• 5. Throughput accounting

B. Decision – making techniques

• 1. Multi – limiting factors and the use of linear programming and shadow pricing
• 2. Pricing decisions
• 3. Make –or-buy and outsourcing decisions
• 4. Dealing with risk and uncertainty in decision – making

C. Budgeting

• 1. Objectives
• 2. Budgetary systems
• 3. Types of budgets
• 4. Quantitative analysis in budgeting
• 5. Behavioural aspects of budgeting

D. Standard costing and variance analysis

• 1. Budgeting and standard costing
• 2. Basic variances and operating statements
• 3. Material mix and yield variances
• 4. Planning and operational variances
• 5. Behavioural aspects of budgeting

E. Performance measurement and control

• 1. The scope of performance measurement
• 2. Divisional performance and transfer pricing
• 3. Performance analysis in not -for – profit organizations and the public sector
• 4. External considerations and behavioural aspects.

Approach to examining the syllabus

Paper F5, performance management seeks to examine candidates’ understanding of how to manage the performance of a business.
The paper builds on the knowledge acquired in paper F2, Management Accounting and prepares those candidates who choose to study paper P5, Advanced Performance Management.

The syllabus is assessed by a three- hour paper- based examination. The examination will contain four compulsory 25- mark questions. There will be calculation and discursive elements to the paper with the balance being broadly in line with the pilot paper, which contains questions from four of the five syllabus sections. Generally , the paper will seek to draw questions from as many sections of the syllabus as possible.