Sai Manikanta Pedamallu

A follow-up to the first part of this article featuring a discussion on the five focusing steps of the theory of constraints, with examples of how these steps might be applied in practice or in the exam. In the previous article, a member of the Performance Management examining team revealed all about The Goal, the book in which the theory of […]

A member of the Performance Management examining team shares her latest read and how it changed her views on throughput accounting and the theory of constraints. I’ve just finished reading a book. It was the type of book that you pick up and you cannot put down (other than to perform the mandatory tasks that running a house and looking

Target costing and lifecycle costing can be regarded as relatively modern advances in management accounting, so it is worth first looking at the approach taken by conventional costing. Typically, conventional costing attempts to work out the cost of producing an item incorporating the costs of resources that are currently used or consumed. Therefore, for each unit made the classical variable

ABC undoubtedly requires an organisation to spend time and effort investigating more fully what causes it to incur costs, and then to use that detailed information for costing purposes. Conventional costing distinguishes between variable and fixed costs. Typically, it is assumed that variable costs vary with the number of units of output (and that these costs are proportional to the

There is no doubt that transfer pricing is an area that candidates find difficult. It’s not surprising, then, that when it was examined in June 2014’s Performance Management exam, answers were not always very good. The purpose of this article is to strip transfer pricing back to the basics and consider, first, why transfer pricing is important; secondly, the general

Performance management—the processes that ensure organisations meet their objectives—is core to the Performance Management syllabus, and understanding modern performance measurement systems is an important area within this topic. Performance Management students should already be familiar with Kaplan & Norton’s Balanced Scorecard which is a regularly examined topic and one of the foundations of modern performance measurement. Fitzgerald and Moon’s Building

Performance evaluation is a regularly examined requirement in the F5 Performance Management exam, and is a topic that students tend to misunderstand and struggle with. Often examined as a full, 20 mark requirement, the task of crafting a free-form answer that incorporates both supporting calculations and a developed, written discussion is a daunting task. It’s unfamiliar territory moving up from

Information systems (IS) is a topic you need to be ready for in all sections of the Performance Management exam. The examiner reports state that students regularly overlook this area of the syllabus, so make sure you cover it during your studies. Information systems (IS) are critical for Performance Management (PM). Information systems greatly aid in defining, measuring and monitoring

‘Relevant costs’ can be defined as any cost relevant to a decision. A matter is relevant if there is a change in cash flow that is caused by the decision. The change in cash flow can be: additional amounts that must be paid a decrease in amounts that must be paid additional revenue that will be earned a decrease in