CIMA
Management Level – Paper P2
ADVANCED MANAGEMENT ACCOUNTING
Exam Practice Kit
Tutor contact details
Tufal Choudhury
[email protected]
077
... [Show More] 9090 4122
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P2 ADVANCED MANAGEMENT ACCOUNTING
Syllabus overview
Focusing primarily on the long term, P2 builds on the insights about costs and their
drivers (from P1) to provide the competencies needed to analyse, plan and manage costs
to support the implementation of the organisation’s strategy. It shows how to manage and
control the performance of various units of the organisation in line with both short-term
budgets and long-term strategy. Finally, P2 covers investment decision making and the
risks associated with such decisions. It provides the basis for developing deeper
understanding of various types of risk affecting the strategy and operations of
organisations (covered in P3).
Syllabus topic Syllabus
weighting
Chapters relevant from
the Acorn study manual
A. Cost planning and analysis for
competitive advantage 25% 2,5 and 6
B. Control and performance management of
responsibility centres 30% 1,4 and 8
C. Long-term decision making 30% 7
D. Management control and risk 15% 7 and 9
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CONTENTS
Objective test questions
Chapter
Question
page
number
Answer
page
number
1 Introduction to relevant costing 5 143
2 Learning curve theory 19 151
3 Pricing 29 161
4 Beyond budgeting 39 167
5 Activity based costing 49 175
6 TQM techniques 69 191
7 Long-term decision making 89 205
8 Performance management and transfer pricing 103 223
9 Management control and risk 127 237
MOCK 1 90 minute test (syllabus mixture of 60 questions) 253 273
MOCK 2 90 minute test (syllabus mixture of 60 questions) 283 299
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Chapter 1 - Introduction to relevant costing
1.1
Relevant costs need to be considered in decision making.
Which of the following if any are characteristics of relevant costs?
Future costs
Sunk costs
Incremental costs
Avoidable costs
Fixed costs
Common costs
Differential costs
1.2
Z Plc has 400kg of material in stock that had cost £1,750. The company no longer uses
the material and if sold for scrap would earn £1.75 a kg.
Z Plc however is considering taking on a special order from a customer, which would
require 500kg of this material. The current price of the material at present is £4.50 per kg.
When using relevant costing, the cost of this material is:
A A sunk cost of £1,750
B An opportunity cost of £700 and an incremental cost of £450
C An incremental cost of £1,150
D A sunk cost of £1,750 and an incremental cost of £450 [Show Less]