Model Question Paper of Strategic Cost & Performance Management


Model Question Paper of Strategic Cost & Performance Management

The Strategic Cost & Performance Management exam builds upon the skills and knowledge examined in the CA Inter papers.

  • Paper 6B – Strategic Management
  • Paper 4 – Cost & Management Accounting

At CA Final level it will be expected to demonstrate an integrated knowledge of the subject and ability to relate to the technical understanding of subject

The below chart will provide the links between this exam and other exams preceeding or following it.



Weightage is an important part for the exam preparation.

Question paper should be in accordance with the skill wise and part wise weightage given in curriculum of the subject.


Strategic Cost Management

Assessment in this paper is by way of Case Scenario based MCQs. Part A and Part B carry EQUAL Section-wise Weightage


Strategic Performance Management



Part – A

Strategic Cost Management

  1. An Introduction to Strategic Cost Management
    • Managing Cost Strategically- Strategic Cost Management, Limitations of Traditional Cost Management, Traditional vs. Strategic Cost Management
    • Organisational Context- Gaining Competitive Advantage, Value Proposition, Osterwalder's Business Model Canvas
    • External Environment Context- Industry Profitability, Basis of Competition, Industry Key Success Factors, Understanding Customers and Markets
    • Information Technology the Strategic Context- IS/IT and Porter’s Five Forces, IT/IS and the Value Chain
    • The Role of Management Accountant as a Leader- Communication, Decision Making, Business Ethics


  1. Modern Business Environment
    • Introduction/ Characteristics of the Modern Business Environment
    • Quality to Business Excellence- Cost of Quality, Total Quality Management
    • Supply Chain Management (SCM)
    • Gain Sharing Arrangements
    • Downsizing, Outsourcing and Offshoring
  1. Lean System and Innovation
    • Introduction to Lean System
      • Just-in-Time (JIT)
      • Kaizen Costing
      • 5S
      • Total Productive Maintenance (TPM)
      • Cellular Manufacturing/ One-Piece Flow Production Systems
      • Six Sigma (SS)
    • Introduction to Process Innovation
  1. Specialist Cost Management Techniques
    • Cost Control/ Waste Control, Cost Reduction
    • Target Costing
    • Throughput Accounting and Theory of Constraints
    • Life Cycle Costing
    • Environment Management Accounting
  1. Management of Cost Strategically for Emerging Business Models
    • Changing Business Environment- Digital Technologies, Business Ecosystems, Hyper competition, Transformation and Disruption, Advanced Manufacturing, Lean Start-up, Agile Organisations, Start-ups vs Incumbents, Intrapreneurship, Innovation Hubs and Incubators, Supply Chain
    • Business Models
      • Hyper disruptive Business Models
      • Models relevant to Sustainability
      • Models relevant Emerging National Markets
    • Strategic Responses to New Business Models
  1. Strategic Revenue Management
    • Decision Making Techniques
      • CVP Analysis
      • Relevant Cost Concepts
    • Pricing Decisions
      • Theory & Principles of Product Pricing
      • Pricing – New Product, Finished Products, Pricing of Services, Emerging Business Models
      • Sensitivity Analysis in Pricing Decisions
    • Pricing Decision under Special Circumstances
    • Ethical and Non-financial Considerations
    • Pricing Strategies
      • Pricing Strategies
      • Kano’s performance attributes
  1. Strategic Profit Management
    • Operating Profit Analysis
    • Activity Based Profitability Analysis; Activity Based Management (ABM); Activity Based Budgeting (ABB)
    • Pareto Analysis

Part – B

Strategic Performance Management

  1. An Introduction to Strategic Performance Management
    • Performance Management and Its link to Strategy
    • Role of Performance Management in Business Integration using Models such as Value Chain and McKinsey’s 7S
    • Influence of Organisation's Structure, Culture and Strategy on Performance Measurement
    • Strategic Performance Issues in Complex Business Structures
    • Behavioural Aspects
    • Predicting and Preventing Corporate Failure
  2. Strategic Performance Measures in Private Sector
    • Critical Success Factors and Link to Performance Measurement, Key Performance Indicators (KPI)
    • Financial Measures- Gross Profit, ROCE, ROI, EPS, RI, NPV, EVA
    • Non-Financial Performance Measures- Linkage between performance measures (Balanced Scorecard); Link Strategy, Operations and Performance (Performance Pyramid); Link between achievement of the corporate strategy and the management of human resources (The Building Block Model); Triple Bottom
    • The role of quality in management information and performance measurement
  3. Strategic Performance Measures in the Not-for-Profit Organisations
    • Diversity in objectives, difficulties in measuring
    • ‘value for money’ service provision as a measure of performance in not-for-profit organisations and the public sector.
    • Adapted Balanced Scorecard.
  1. Preparation of Performance Reports
  2. Divisional Transfer Pricing
    • Meaning, Purpose & Principles of Transfer Pricing
    • Methods of Transfer Pricing
    • The Behavioural Consequences arising from Divisional Structures
    • International Transfer Pricing
  1. Standard Costing
    • Analysis of Advanced Variances
    • Integration of Standard Costing with Marginal Cost Accounting
    • Reconciliation of Profit
    • Variance Investigation Techniques, Interpretation of Variances, Possible Interdependence Between Variances and Reporting
    • Behavioural Aspects of Standard Costing, Limitation of Standard Costing (including its use in the contemporary business environment)

Prescribed Skill Assessment Weightage


Comprehension & Knowledge



Analysis & Application



Evaluation & Synthesis


Skill Assessment Level


Comprehension and Knowledge


Application and Analysis


Evaluation and Synthesis

§  Retention and recall of Knowledge.

§  Understanding of major management accounting theories.

§  Use of knowledge and techniques in new but familiar situations.


o   Define

o   Describe

o   Distinguish

o   Explain

o   Identify

o   Illustrate

o   List

o   State

o   Outline

o   Understand

o   Recognise

§  Using relevant concepts and theories.

§  Analysis of unfamiliar situations to solve problems.

§  Recognition of tricky or hidden info patterns and trends within financial and non-financial information in order to identify root causes and find evidence to support judgments.


o   Apply

o   Calculate

o   Demonstrate

o   Determine

o   Perform

o   Prepare

o   Reconcile

o   Record

o   Use

o   Conduct

o   Analyse

o   Discuss

o   Compare and Contrast

o   Develop

o   Examine

o   Monitor

o   Prioritise

o   Produce

o   Align

o   Communicate

§  Evaluation is the examination or assessment of problems and use of judgement to get conclusions.

§  Synthesis involves integration of data and information            by

identifying                           and segregating relevant and irrelevant facts.

§  Use of reasoned argument to infer and make judgments.

§  Presentation and justification of valid recommendations.


o   Advise

o   Evaluate

o   Recommend

o   Review

o   Select

o   Assess





Format of the exam

This exam will contain three sections: Section A, Section B and Section C.

Section A

This section of the exam contains four cases comprising a ‘scenario’ which relates to

six objective type questions, each worth 2 marks.

Section B

This section of the exam contains four cases comprising a ‘scenario’ which relates to

four objective type questions, each worth 2 marks.

Section C

This section of the exam contains two cases comprising a ‘scenario’ which relates to

three objective type questions, each worth 2 marks. AND

In addition, this section of the exam also contains two cases comprising a ‘scenario’ which relates to two objective type questions, each worth 2 marks.




  • ALL objective type questions (MCQs) will be strictly based around a common scenario ‘case’.
  • The syllabus is assessed by a three-hour computer-based examination
  • The mix of questions and the nature of objective test questions means that some questions will take longer to answer than others. The question paper should be able to solve within specified time of 3 hours.
  • The proportion of numbers to words will vary slightly from exam to exam. It is not possible to make it exactly same in every exam, nor is it deemed necessary to do this. The mix will change slightly depending on the topics being examined, among other
  • Case Scenarios/ MCQs beyond the scope of syllabus should be strictly
  • Many a times, the question paper contains questions which can have alternative solutions owing to the possibility of solving the same with different assumptions. Such questions should be The language of the question should be clear and unambiguous, leaving no scope for alternate assumptions.
  • Ensure that no question is erroneously or ambiguously worded, leading to an interpretation different from the question intends to Each question should linguistically be unambiguous, clear, accurate and free from all limitations. Therefore, questions should be checked thoroughly for completeness and clarity. Adequate attention should also be given to drafting of the questions and proof-reading of the same before they are printed/ hosted/ uploaded.



Exam Summary

Time allowed: 3 hours.

This exam is divided into three sections:

Section A

  • Four OT cases, each containing a scenario which relates to six OT questions, each worth 2 marks.
  • 48 marks in

Section B

  • Four OT cases, each containing a scenario which relates to four OT questions, each worth 2 marks.
  • 32 marks in

Section C

  • Two OT cases, each containing a scenario which relates to three OT questions, each worth 2 marks.
  • Two OT cases, each containing a scenario which relates to two OT questions, each worth 2 marks.
  • 20 marks in

All questions are compulsory


1FIN by IndigoLearn