ACCA PM study guide
ACCA PM · Work through your exam, one topic at a time.
Performance Management (PM) is one of ACCA's Fundamentals-level exams, positioned after Management Accounting in the qualification sequence. ACCA describes its purpose as developing "knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for planning, decision-making, performance evaluation and control." It suits students who already understand basic costing and want to move into interpreting information for decisions rather than just recording it - typically part-qualified accountants working in or alongside a finance function. Content spans specialist management accounting techniques, decision-making techniques, budgeting and control, and performance measurement and control, with roughly equal weighting across the four areas. Preparation should be active: work through the ACCA Study Hub chapters, then spend the majority of your time on exam-standard question practice under time pressure, marking your own answers honestly against the model answers. Topics on this exam: Specialist management accounting techniques, Decision-making techniques, Budgeting and control, and Performance measurement and control. The ACCA PM study guide has 4 sections and about 1,154 words.
01Specialist Management Accounting Techniques
Know the distinction between absorption costing and activity-based costing (ABC) . Absorption costing allocates overheads on a single volume driver (labour hours, machine hours), so high-volume products absorb more overhead.
329 words, about 2 min02Decision-Making Techniques
Only future, incremental cash flows are relevant. Sunk costs, committed costs and non-cash items such as depreciation are excluded.
287 words, about 1 min03Budgeting and Control
Understand incremental (last year plus adjustment), zero-based (every cost justified from scratch) and rolling (continuously updated) budgets. Activity-based budgeting builds from cost drivers.
255 words, about 1 min04Performance Measurement and Control
Know ROI (divisional profit / capital employed) and residual income (profit − imputed interest on capital). ROI can discourage managers from accepting projects below current ROI even when they earn more than the cost of capital; RI avoids this.
283 words, about 1 min