ACCA F5 Performance Management Smart Notes Razzq Khan

Jul 17, 2026

Uploaded by Liam

ACCA F5 Performance Management smart notes focusing on product and overhead costing techniques. Content explains absorption costing as a three-stage process—allocation, apportionment, and absorption—using overhead absorption rates such as per direct labour hour or per machine hour. Includes overhead absorption concepts, the OHAR formula based on budgeted overhead and activity, and the mechanics of over- and under-absorbed overhead. Further sections contrast marginal costing with absorption costing by valuing inventories at variable versus full production cost and using contribution to determine profit.

LanguageEnglish

CategoryExam

FormatPDF

Pages98

Reading Time4 h 7 min

AccessFree to download

ACCA F5 PERFORMANCE MANAGEMENT SMART NOTES RAZZAQ KHAN (ACCA) CONTACT \# 03449355165 Email; [razzaqkhan56@hotmail.com](razzaqkhan56@hotmail.com) | | | | | | | | --- | --- | --- | --- | --- | --- | | | | AIM AND OBJECTIVE OF PAPER | | | | | 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. | | | | | | | | | OVERALL POSITION OF THE PAPER | | | | | | | |
| | | | | FORMAT OF PAPER | | | | | | SECTION: A
􀁸 Contain 15 objective test (OTs) questions.
􀁸 Each question worth 2 marks (30 marks in total)
SECTION: B
􀁸 Contain 15 questions ( MTQs)
􀁸 Each question worth 2 marks (60 marks in total)
SECTION: C
􀁸 Contain 2 Questions (Long Questions)
􀁸 Each question worth 20 marks (40 marks in total) | | | | | | | | | SYLLABUS | | | | | The syllabus is divided amongst four broad areas.
1) Specialist cost and management accounting techniques
2) Decision-making techniques
3) Budgeting and control
4) Performance management and control
| | | | | | | PART A
SPECIALIST COST AND MANAGEMENT ACCOUNTING TECHNIQUES | | --- | |
CHAPTERS PAGE | | 1. COSTING 3
2. ACTIVITY BASED COSTING 7
3. TARGET COSTING 9
4. LIFE CYCLE COSTING 11
5. THROUGHPUT ACCOUNTING 12
6. ENVIRONMENTAL ACCOUNTING 18
| | CHAPTER 1 COSTING
In this chapter, we will cover the following topics.
1) Costing
2) The problems of overheads
3) Revision of Absorption Costing
4) Overhead Absorption
5) Marginal Costing
6) Absorption Costing and Marginal Costing compared

1) COSTING
Costing is the process of determining the cost of products, services or activities. Cost accounting is used to determine the cost of products, jobs or services.
| | | --- | --- | | | | |
2) The Problems of Overheads
Indirect costs, or overheads, are costs incurred in making a product or providing a service, but which cannot be traced directly to products or services.
Absorption costing is a means of incorporating a fair share of these costs into the cost of each unit of product manufactured or each service provided.
If a company manufactures a product, the cost of the product will include the cost of the raw materials and components used in it and cost of the labour effort required to make it. These are direct costs ofthe product. The company would, however, incur many other costs in making the product which are not directly attributable toa single product, but which are incurred generally in the process of manufacturing a large number of product units. These are indirect costs or overheads. Such costs include the following
􀁸 Factory rent and rates
􀁸 Supervision costs
􀁸 Machine depreciation
􀁸 Heating and lighting
In a manufacturing organisation, production overheads are incurred in making the output, s

Jul 17, 2026

Uploaded by Liam