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Junior Member
Join Date: May 2008
Location: Lahore
Studying:
P7
Posts: 3
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Hints and Advice About F1, F2, F3 (Part 2)
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As the actual selling price was $0.50 per unit greater than anticipated, the variance is favourable. The key issue is the volume which should be applied to the unit variance. When calculating a price variance, we use actual volume. Therefore, the variance is based on 10,500 units.
The variance is therefore 10,500 units @ $0.50 = $5,250 favourable, or answer A.
Work out your answer
As the incorrect answers are based on common mistakes, it follows that attempting to guess the correct answer is not likely to be productive. Rather, it is essential that you use your understanding of the topic to work out your answer. This will prevent you from being distracted by incorrect options.
SAMPLE QUESTION 3 (taken from the Pilot Paper for Paper F3)
A company’s income statement for the year ended 31 December 2005 showed a net profit of $83,600. It was later found that $18,000 paid for the purchase of a motor van had been debited to the motor expenses account. It is the company’s policy to depreciate motor vans at 25% per year on the straight-line basis, with a full year’s charge in the year of acquisition. What would the net profit be after adjusting for this error?
A $106,100
B $70,100
C $97,100
D $101,600
The first point that most candidates will recognise is that the profit will increase by $18,000 when the van is removed from the income statement and included in non-current assets on the statement of financial position.
This will increase the profit to $101,600 ($83,600 + $18,000). A lack of care could therefore lead to option D being selected, but this ignores the need to include the charge for depreciation. This is $18,000 x 25%, or $4,500, which reduces the profit to $97,100, making option C the correct answer.
This means that, for questions which require calculations, covering the options while you work out your answer can be a productive strategy. Of course, with questions which do not require calculations, the possible answers need to be considered in turn. However, this still requires your answer to be worked out, not randomly selected. These questions might require a decision on which of two or more statements are correct, or which one of a number of statements is correct. In such cases, the best approach is to consider each statement in turn, and decide whether or not it is correct. Once again, the fact that incorrect options are distractors must be borne in mind.
Eliminate incorrect answers
This approach is likely to be most effective in discursive questions which require the correct combination of statements to be selected. Consider a question which offers three statements, and requires the correct combination of correct statements to be selected. The ideal way to answer this is to consider each statement in turn, and decide if it is correct or not. Often candidates will find that they can quickly identify one incorrect statement. On that basis, it is possible to eliminate the options which include that statement.
A question from the Paper F2 Pilot Paper illustrates this point.
SAMPLE QUESTION 4
The following statements relate to relevant cost concepts in decision making:
(i) Materials can never have an opportunity cost whereas labour can.
(ii) The annual depreciation charge is not a relevant cost.
(iii) Fixed costs would have a relevant cost element if a decision causes a change in their total expenditure.
Which statements are correct?
A (i) and (ii) only
B (i) and (iii) only
C (ii) and (iii) only
D (i), (ii) and (iii)
In this case, a quick thought will confirm that statement 1 is incorrect. Materials can often have an opportunity cost. Once this decision has been made, choices A, B and D can be eliminated, leaving C as the correct option. This should then be checked by continuing to consider each of the statements in turn.
OTHER POINTS
There are some other points on which candidates need to make decisions in order to maximise their marks. For each of these, the exam room is the wrong place to make the decision, so it is essential that you have prepared thoroughly.
Above all else, remember that you should not allow yourself to become so stuck on a question so that you run out of time. Generally speaking, the time spent on each part of a question should be in proportion to the marks allocated. With MCQs, however, it may be that some questions are more straightforward than others, and can be answered more quickly. It may be better to consider the time allocation for a group of, say, five MCQs, rather than for each question individually. There is no penalty for an incorrect answer in ACCA exams. There is nothing to be gained by leaving an MCQ unanswered. If you are stuck on a question, as a last resort, it is worth selecting the option you consider most likely to be correct, and moving on. Make a note of the question, so if you have time after you have answered the rest of the questions, you can revisit it.
If you are sitting a paper-based exam, you must not forget to record your answers to MCQs on your Candidate Registration Sheet (CRS), as this is the only way you can obtain the marks you deserve for all your efforts. Workings for MCQs are not marked, and neither are answers written in script booklets as opposed to on CRSs.
CONCLUSION
From this discussion, we can see that MCQs are not an easy option. Maximising your marks in this section of a paper requires:
sound preparation
studying across the syllabus
practising as many different types of question as possible
developing your own strategy for different types of question
thinking clearly in the exam
working out your answers
structuring your approach to the paper
answering all the questions.
Taking this approach does not make answering MCQs easier, but it should mean that you get the marks you deserve.
Key learning points:
Prepare thoroughly
Think clearly
Work out your answer
Structure your approach
Answer all of the questions
Ronnie Patton is examiner for CAT Paper 3
(Best of luck for your exams)
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