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Financial performance – advice on extended writing tasks
The Financial performance computer based assessment (CBA) includes two written tasks, in the form of emails or reports. Cliff Floyd, the Chief Examiner, offers some examples of good and poor answers.
The Financial performance assessment is in two sections. Section 2 contains two written tasks designed to test your application and communication skills. For both tasks you’ll need to read and analyse a scenario. Task 2.1 covers standard costing and variance analysis. It usually provides some key variances and narrative, and you’ll need to explain, analyse, give reasons and suggest improvements. Task 2.2 will provide information on the financials of divisions, products or companies with key performance indicators. You’ll need to explain, analyse and make recommendations. The product lifecycle could feature in this task, so you may need to analyse the income and costs for different stages of the cycle. A typical example of a written task from Section 2 about standard costing You have been provided with the following variances but your colleague has omitted the sign of some of them: Variance Direct material price variance Direct materials usage variance Direct labour rate variance Direct labour efficiency variance Fixed overhead expenditure variance Fixed overhead volume variance Budgeted production Actual production £20,000 £10,000 £3,000 F £7,000 A £9,000 A £5,000 50,000 units 45,000 units Amount

You have also been provided with the following additional information. • • • The supplier of raw materials suggested an improved quality raw material, which should result in less wastage in production. A budgeted pay rise was not given to staff and this resulted in low morale. A machine broke down resulting in delayed production and increased maintenance costs.

Using this information, prepare a report to the Managing Director to cover an analysis of each variance by: • • • • identifying the sign of the variance...