Improve Your ACCA PM Exam Technique: Highlights from the March/June 2025 Report

(NOTE: This examiner’s report should be used in conjunction with the published March/June 2025
sample exam which can be found on the ACCA Practice Platform.)

The ACCA Performance Management (PM) exam is sat as a computer-based exam (CBE), meaning students sit different versions of the paper. 
This report doesn’t review the entire exam -due to the variations - but it focuses on key questions from each section that gave students the most trouble. 
These are exactly the kinds of issues you can learn from.

SECTION A: Watch Out for These Objective Test Pitfalls

The examiner flagged several tricky questions that many students got wrong.

• Internal Reporting Controls

  The Question: Which control ensures internal reports are generated and distributed correctly?

  Correct answer: A – Updating report recipients regularly.

  Why students struggled: Many didn’t consider how dynamic organisations are. If your report distribution list is outdated, it's a control failure waiting to happen!

• Residual Income Calculations

  The Question: Calculate RI using given capital employed and divisional cost of capital.

  Correct answer: $1,638

  What went wrong: Students often forgot to use pre-tax operating profit and the specific cost of capital for the division. Accuracy in plugging values into the RI formula is crucial.

• CVP Analysis – True or False Statements

  Key takeaway: The margin of safety depends on the sales budget and breakeven point. Also, changes in selling price don’t always change contribution ratios proportionally—get the calculations right.

• Throughput Accounting & Bottlenecks

  The trap: Don’t just pick the machine with the fewest hours—calculate the maximum units per stage to find the real bottleneck.
   In this case, Stage 2 was the bottleneck and needed more capacity.

SECTION B: Relevant Costs & Decision-Making

Using the case study on Hurstmid Co which tested knowledge of relevant costing, outsourcing, and pricing strategies.
Key Learning Points:

1. Discontinuing Products: Only stop making products that cause a net loss after considering variable and attributable fixed costs.

   Stop: Leisuro (loss)
   Keep: Serenito (small profit)

2. Make or Buy Decisions
   Use relevant cost comparisons. Serenito was cheaper to produce in-house than buying from Hampar Co.

3. Minimum Pricing
   Yes, it covers incremental + opportunity costs, but beware—it can damage perceived value and may make price increases harder later.

SECTION C: Written Questions – Boost Your Technique

Eastern Hospitals Trust – Performance Measurement
This not-for-profit scenario focused on the 3 E’s: Economy, Efficiency, Effectiveness

• What you need to do

  Use the correct headings when analysing.
  Don’t just define—apply the concepts to the scenario.
  Explain why a balance across all 3 E’s is essential (cost-cutting alone won’t deliver high-quality care).

• Challenges in Measuring Performance
  Students often missed the point here. The question wasn’t about how EHT performed—but how hard it is to measure performance:

  Subjectivity in patient feedback.
  Difficulties in data accuracy and consistency.
  Resistance to data collection due to staff shortages.

Budgeting (Quality Tyres Co): Spreadsheet Strategy

In this task, students had to complete an activity-based budget.

1. Common Error 1
   Miscalculations due to not breaking down steps (e.g., sales volume → production quantity → batch size).

2. Common Error 2
   Writing vague responses in written parts such as: "ABB is costly". This isn't enough—explain why!

Key Tips from the Examining Team

1. Show your workings – Even for MCQs, it helps you think clearly and avoid simple mistakes.

2. Avoid vague statements – Especially in written sections. Explain your points fully, with context and clarity.

3. Understand the syllabus – Don’t just memorise formulas. Know what the examiner is testing, and apply your knowledge to real-world scenarios.

4. Focus on exam technique – Poor structure, lack of headings, or not answering the actual question are all avoidable mistakes.

5. Make sure your familiar with the CBE format
   The examiners really urge students to practise full questions, review model answers, and get familiar with the CBE format.

Take a look at aCOWtancy's ACCA PM classroom and see how our ULTRA marking and feedback can give you the edge in your exam technique - and that means boosting your chances of passing first time!

https://www.acowtancy.com/papers/acca-pm/