*** F5 June 2012 Exam was … Comments and Instant Poll ***

this is really cheating…………..because if exams are set like this ,then students will fail and in return the board will make a lot of money………….nice way to earn more revenue……because the CoS will be zero for them…………………

Btw anybody know if graph will be lowered if pass rate is low ?

Does ACCA work that way ?

Also, when will results be out ?

Her reports are right in that we should not question spot and I didn’t at all. I covered the syllabus fully.

One thing nagging is the labour efficiency variance in Q4. There was no Labour rate variance as stated per Q. And the given variance from the table for Labour was 1760(F). This is all related to the efficiency but for the life of me could not get this answer.

The way I approach is say how may hours did they actually work for the 960 actual units produced. And compare to how many units should they have worked for the for the 960 units using standard hrs per unti which was 2. So 2 x 960 = 1920 hours.

They actually worked per the Q 1824 (or something similar) so there is a favourable variance of 96 hours. Multiply this by standard hourly rate which is $10 so 96 x $10 = $960……. not the 1760….

I do not think we had to restate the standard costs and show planning and operational variances as this was not the nature of the Q. It was just a standard Variance Q but proved quite baffling.

I decided to apply the correct methodology and assume they all reconciled to the actual contribution as the question asked.

I guess I’ll get some credit for workings…

kirinski said 3 hours, 14 minutes ago:

I thought that the exam was very hard, bordering on a disaster.
After having spent months studying and revising CostVolumeProfit charts and limitations, drawing Decision Trees and calculating the value of perfect / imperfect information (both new areas of syllabus), performing complex costing excercises with Leraning Curves etc, and becoming a professional linear programmer (seriously, I could coach students on this item now) – NONE – absoluetly NONE of thsis – came up.

When I saw the contents of the paper, the only Question that I was happy to see was the Variances part 1. Easy really (again, spent a lot of time revising this). This is the only question which actually was expected, so not sure why anyone would complain about this one.
First, take original budgeted contribution, then adjust for sales volume variance (which in this case consisted of 2 parts: operational FAV and planning ADV – as the market went down by 10% so this was planning var)
So you get flexed budgeted contribution
Apply all basic variances
Reconcile to the actual contribution

The part of the question asking about applicability of standards in TQM environment was more difficult, but essentially standards are of limited use in the highly automated environment such as TQM and JIT.
Not sure if I answered enough on the subject though, tried to make a few points.

The question on multiplicative models and seasonal variations: had NO idea where to start so did not even try.
Answered A LOT on the imposed budget style and bad forecasting.
– de-motivational effect
of imposed budget where the GM is not interested in reality nor opinions of others
– the incentive scheme perceived as “bogus” since GM clearly has no intention of ever paying bonuses
– cost of disposing of the bl**dy unsold sauces
– issues with deep discounting of sauces when need to shift inventory – inbuild expectations by the customers of low prices in the future
– damage to the company’s image due to deep discounting practices (perceived inferiot quality)

I think I did OK on the target pricing in NHS trust.
I think the question was not that bad.
Target price fot the operations on heart (which are paid AT COST but within certain annual budget): target price = total annual budget / divided by the planned number of operations on heart
– since no surplus is re-funded to the trust, there is no point worrying about creating such surplus
Hence, just keep within annual allocation for these operations.

For all other operations (which are paid at a fixed fee):
the fixed fee here is similar to the “competitive or optimum price” in the normal manufacturing environment.
So steps are the same from this point:
– fixed fee is your “target price”
– deduct from this the necessary margin/profit %
– arrive to target cost
– compare to current cost, close the gap

the difficulties are to do with the regional differences (NHS trust in the Soust of UK would have different costs to NHS trust in the North due to different salaries’ and wages, rent etc)
So in the South you would have more difficulties closing the gap than you would in the North.
– deep cost cutting is always controversial, especially when it comes to HEALTH. The tax-payers (who ultimately fund the Trust) are not going to be too happy about DEEP cost cutting excercises (and they WILL know, through newspapers, investigative journalism etc).
Reputational image to the hospital and political pressure may follow.
– cost cutting could affect quality, e.g. reduced spending on cleaning would increase infection rates etc

Buy or make: I came to the conclusion that none of the 2 products should be outsourced. I totally ignored the depreciation and insurance, as surely these are NOT relevant? – yes the question did state that 40% of the total charge are connected to the production of keypads and screens, but surely the depreciation is not going to immediately disappear into the window (on existing plant) if you outsource??
I mean, where does all this plant go? – out of the window? Or may be I misunderstood this requirement.

Then there were marks available for discussing the implications of outsourcing:
-social aspect (redundancies which are NOT the case as we are told that labout is in short supply?? – REALLY? Which planet is the examiner ON? – short supply of labour to put together a few bits and pieces of keypad? – it’s hardly a realistic scenario in the current economic environment!!!)
– moving the primary function elsewhere. The only point of RobberCo existing is to make keypads and screens, if it’s outsourced, what’s the point of this company?
– reliability – flexibility of supplier
– quality control. This is essential as RobebrCo undertakes any repairs FREE, so if anything is faulty, this will cost the company dearly in the end
– potential delays in transporting the parts and also potential delays at CUSTOMS – whoever worked in the industries whereas custom clearance is needed, would know very well that delays are inevitable, if not all the tme, at least time to time
– commercial secrets etc, said it was unlikely as pretty standard products and no “know-hows” expected
– value attached to the products being made “in-house” is unlikely to apply – these are keypads and not Italian designer shoes, so who cares where the keypad is made !!!

Finally, ROI and RI.
The theoretical discussion about goal congruence etc was OK and should score some marks. I did not to it brilliantly but I think more or less OK.
Original ROI / RI was easy – just annualise!
Then I said that if we calculate the “old ROI” we get a healthy growth from prior 3 motnhs, so it’s the “stupid” managers’ decision to charge head office costs, which is eroding ROI.
And that the divisions, if they WERE assessed on the original basis, would have shown great results.

Then I said it was indeed very strange that the head office decided to impose their costs and not to lower the target ROI. It’s illogical and simply not acceptable.
Don’t know if this was the clever comment to make. Who knows.
I know that in real life the divisional managers should have told the head office to go away and re-think such approach.

On the new project, charged depreciation over 6 months to arrive to the value of net assets – but stupidly forgot to adjust the net profit for the amount of depreciation!
so don’t expect any marks here…

Overall, because I did not answer at all the forecasting of sales and did not attempt the part of Make or Buy about how many to produce if more labour available (run out of time), also not sure if answered Make or Buy original correctly (I said NOT to buy, make for both products), I can only hope to get something like 50-55.
I am hoping that I shall scrape this one – due to my written parts, but who knows…. may be not.

If not, not a big deal and shall re-sit in December, with the hopes that all my hard studying would pay off !!!! (linear programming, decision trees, risk and uncertainty, CVP analysis, Buildign Blocks, optimum price equations, learning curves etc etc – all that was simply wasted on this sitting! – not to mention my scientific calculator which did not get used….I may as well take it back to the shop)

Am I upset?
Not really, as we have been told many times that we should not try to “predict” the exam topics.
However, this exam, in my view, was simply not wide enough – my coverage of the syllabus was very wide, however this made little difference to my performance, which was just well below what I have expected it to be.

To all those who think they failed: the game is not yet over, let’s wait for the results and see! You and I may have just scraped above 50!
After all, pigs CAN fly, right? – Keep your hopes alive!

Feel quite relieve from ur answers, though did not attempt the question on forecasting on first part n part of RI, TQM is a technique to achieve quality, high quality product, through good quality material and efficiency, TQM cannot replace Std costing, std costing investigate on discrepancies between budgeted and actual, just hope we get the 50 marks!

horrible!!!!!!!!!the exam was verry unpredictable.it was unexpected of ann ions.She just made life hard for us.no abc,no cvp ,enviromental accnting.

Didnt get quest 1(b) !
Question on multiplicative model had no clue how to do it:/
What do u guys mean by annualising the ROI? How did guys do it?
The other questions were ok for me,i think..
hope no need to resit in dec!!!

apparently we needed to multiply the monthly net profiy by 12 to get annual amount and then calculate roi,ri with this figure. I didnt eve see annual in question.

Can someone please share: were we supposed to outsource or not ? (based on 80,000)?
I calculated that our savings are going to be lower than the price offered for keypads / screens.
I did not take into account the depreciation at all (not even 40%).

What did you get?

In response to @kevgooner:
(sorry cannot “quote” for some reason)

There WAS a planning and operational component to the variance question, in my view, but it was in relation to sales volume variance (and not to do with costs variances).

There was a note in the question on the market being 10% below expected, or something like that.

So, the original budgeted contribution had to be reconciled to the FLEXED budgeted contribution – via sales volume variance, which in turn consisted of 2 components:
– adverse planning variance, i.e. per plan we should have sold less as market was shrinking
– favourable operational variance, i.e. we sold more than expected in the face of the shrinking market

This is what I have done and my reconciliation worked.

I though the exam was exceptionally unfamiliar and unexpected..not that the contents don’t relate to the syllabus its just that i felt it was so narrowly focused on service sectors. True enougn service is quite the thing of the day but there is so very much more to performance management. I felt a bit disadvantaged in that my results will reflect something totally different from what really went on. I studied tirelessly, made so much sacrifices but i cant know the entire book; somethings will just remain on the lower end of the brain and services was just one of those things. It’s terribly unfortunate that i would most likely fail a paper of which a greater proportion in which i understood was never examined. I am not easily moved; i will prevail in Jesus Name.

Hard paper for me. Was quietly confident going in to the exam.I even pulled back on my revision the last few days to rest my brain but that was clearly a mistake. I was caught out by the TQM and multiplicative model (which I know is easy if you know it). I don’t think I answered the target costing question very well either so I’ll have to be almost flawless in the rest of the exam which will be difficult.

Can’t complain too much as we’ve been told over and over again that the whole syllabus can be tested, although neither BPP or Kaplan had TQM and MM in any of their revision kits if I’m not mistaken so their value for money is questionable especially when they are made of mostly of old exam questions which are accessible for free on the acca website.

I reckon I’ve scored between 35-55 so 25% chance of a pass. First resit coming up in all likelihood though.

Right People. I signed up to opentuition just to let my feelings out.

Prior to this I had done F1-F3 and F6 about 4 years ago. But I decided to get back onto the ACCA as my employer is forcing me to do it.

I signed up for online tuition with one of the best london ACCA providers (paid for by my employer!) I watched every single video on every chapter and attempted the examples with the tutor. I started from scratch tuesday 5th June and thought that it was way too late.I mean I could barely remember absorption costing from F2 so it was literally from scratch.

Anyway after covering every chapter and then working on past papers (all the way back to 2008 and mock papers) from Thursday to Sunday I felt confident. Everything was fresh in my memory. I was prepared for any topic.

During planning/reading time it dawned on me that this paper was totally unfair. As most people would have covered some of the topics which came up weeks ago and not have concentrated on them as they don’t reflect the module at all.

I started from Q5. Without reading the question I started calcultaing the ROI based on controllable profit. The reading the later part of qustion made me realise I had to use net profit. Also I multiplied the net assets by 10% capital (not sure why else they would give this in question!!) to get around 2.3m for controllable investment. Getting ROI of around 15% i think for both. This was probably wrong. But both divisions were getting above target 20% using gross controllable profit. Didn’t answer the middle bit (on new investment) as I thought i’d come back to that. Answered the last part and argued that it’s unfair to have uncontrollable costs such as fixed costs imposed on managers blah blah blah.

Q4: Worked out all the variances apart from planning and operational. Silly of me not to assume that from question.TQM – I have never heard of this expression and this is nowhere to be found in the notes. (I’m still looking for it lol). Anyway I kind of got the idea of what it was asking.

Q3: Now I actually smiled to myself as this was fresh in my memory. Time series has hardly come up and I think this is the first time the multiplicative model came up. It was actually very easy in terms of computation but I was thinking the majority of people have probably forgotton if they studied it weeks ago.

Q2: Was 100% discursive and I felt I answered it ok.

Q1: Now the reason why i left this till last was because I couldn’t decide which method it was. Was it thorugh put? Was it Linear Programming? (the lack of graph paper answered that question). Anyway I was thinking of this question all the way through the exam and I just realised it’s a matter of revising the costings based on the assumptions and comparing to Burgistan (Seriously?? Was the examiner eating a burger when cominng up with this?). I got the making of 100 and 50 unit as most people have stated.

So that was that. I answered most questions but only because I started from scratch a week ago. I think I might have passed. Despite that, i feel that all of the really core areas of F5 weren’t tested at all. My provider had decision trees on both mocks as they were confident it was coming up.So many other critical areas that wasn’t tested. I feel this might even be the lowest pass rate ever on F5.

I hope I pass but this looks like the paper ACCA will use to stop people reaching the professional level. ACCA has become such a mainstream course it’s almost become worthless in my opinion.