Paper 1.2 Exam Tips

For each area described below, please note the reference to useful questions from BPP’s 2007 Practice and Revision kit (P&R kit).

Section A – 25 MCQs (50 marks – 50%)

Expect Section A to have broad syllabus coverage.  It is best to set yourself ‘multiple choice question (MCQ) tests’, to time, which include a selection of questions from different areas of the syllabus.  There are plenty of MCQs in the P&R kit (pages 33 – 110), which are split into sections relating to different syllabus areas.

Ensure you take a look at questions in sections 1-3, which have more wordy questions and not just the numerical style ones.  

Section B – Five compulsory questions (Worth between 8-12 marks each – 50%)

Section B questions will be primarily computational; however, increasingly the tasks are broken down into 2-3 parts, with a written element for between 2-3 marks.  Some areas we feel likely to come up are:

• Absorption Costing - Complete part of the absorption costing process (allocation / apportionment etc) or construct a P&L under either AC or MC (or both) and possibly reconcile the difference in profits. Be able to explain the different stages of absorption costing. See Q43 Duo Ltd, Q44 Langdale Ltd and Q46 Pinafore Ltd.  
• Break-even - Calculate break-even or sketch a break-even chart.  See Q57 Questions with answer plan: Break-even.

• Variance Analysis - Construct an operating statement to reconcile budget profit to actual profit having calculated sales and cost variances, possibly with a slant towards overhead variances. Provide explanations for what may have caused the variances. See Q75 Murgatroyd Ltd and Q77 Deadeye Ltd.

• Relevant Costs and Decision Making – Calculate the relevant cost of a scarce resource by applying the opportunity cost concept. See Q61 Ennerdale Ltd.

• Limiting Factor Analysis – Use linear programming to draw a graphical representation of a problem that has more than one limiting factor and interpret the result. Conclude on a contribution maximising or cost minimising solution. See Q64 Linear programming.
• Pricing Policy - Discuss pricing policy including some calculations as in Q67 Pricing.

REMEMBER, TIME MANAGEMENT IS VERY IMPORTANT, 1.8 MINUTES PER MARK!!