CA.

DINESH JAIN ADVANCED MANAGEMENT ACCOUNTING

Advanced Management Accounting – preparation strategy:

Question No.1 – How do I complete the costing paper as it lengthy?

Advanced Management Accounting paper has been very lengthy and people have found it
difficult to complete the paper on time. Non-completion of paper on time also ends up
impacting the overall score. Following is my recommendation for completing costing paper:
Question Application You should answer this question to improve the time
No.7 theory/ Direct management in exam. It would either be a direct theory
theory question question or an application theory question. You would
(refer question be able to complete this in 15 mins.
No.2)
Question Mandatory This question will have four sub-parts and it is
No.1 question compulsory to attend. You can try to take around 8
minutes for every 5 marks question and complete this
part in 32 minutes
Question 4 out of five In AMA institute has not repeated past questions and
no. 2 to 6 questions they keep testing on new questions. Any new problem
takes slightly higher time to complete and hence time
management is very important. Completing question
no.1 and 7 (36 marks) in 47 minutes would give you
good amount of time to complete the balance
questions. Please don’t spend more than 30 minutes
on one question
Question No.2 – How to prepare for direct theory and application theory question?
Direct Direct theory questions are straight forward question and they will test
theory your memory power. They may ask questions like what is degeneracy,
Question what is inter-firm comparison, requirement for performance budgeting etc.
You can prepare for direct theory from the following two sources:
Source 1 – Summary given at the beginning of each chapter in practice
manual
Source 2 – 92 pages theory book available in below link
https://drive.google.com/open?id=1RuHGkSmIDLcoKlg0IZJBx23BTDyI
YqYt
Applicatio Application theory question are where we are required to apply the general
n theory theory learnt from source 1 or source 2. The question can ask to categorize
question items in four quality costs, three measures of TOC, four perspectives of
balanced scorecard. This is a tricky area and answer can change based on
assumption. Hence following two important points:
❖ You will be able to answer this only if you know the various
categories. Hence please complete theory through source 1 or
source 2
❖ Write a justification for your answer even if they do not ask for
the same. This is because an item can be classified as prevention
cost or appraisal cost depending on the justification for the
answer
Question No.3 – How to prepare practical problems?
I would suggest you to follow ICAI material and notes given by the academy where you
have gone for classes. You can also refer my question bank (downloaded from
www.instamojo.com/bharadwajinstitute). The answers to the question bank are also
available from the same link

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Question No.4 – Chapter wise preparation strategy:
Chapte Theory/practic Strategy
r al
1 Theory and Most important chapter from exam point of view. Carries
problems around 20 percent weightage in exams. However, this is an
area which is generally ignored by students. Please do this for
chapter 1:
❖ Solve entire practice manual
❖ Solve entire study material
❖ RTP + Suggested answers (can be taken from my
question bank)
Areas which are there in chapter 1:
❖ Activity based costing
❖ Target costing
❖ Theory of constraints
❖ Total quality management/quality costs
❖ Life cycle costing
❖ Just in time
❖ Value chain analysis (theory)
2 Problems This chapter will have weightage of around 20 marks in
exams. However, I would suggest that don’t put more efforts
in this chapter. Practice manual as well as study material is
huge and if you skip this chapter then you will end up saving
huge time for costing preparation. However, I assume you
would have gone for classes and be aware of the basics and
hence please be aware of the following:
❖ Relevant costing (you can refer my youtube lectures
(https://youtu.be/FzdMnhBJWFs and
https://youtu.be/Rdc6bPoQDfg)
❖ Indifference point and shut-down point
❖ Limiting factor and sale mix problem
❖ Limiting factory and production mix/subcontracting
❖ Make or buy decision
❖ Further processing decisions
❖ Dropping a product line
Note:
❖ Don’t try to solve many questions in this area. If you
solve 200 problems, you would get 201st problem in
exam and hence you will find it difficult. You should
be clear with core concepts and hence you can
attempt the problem and score around 10 out of 20
marks from this chapter. You may also leave the
question in choice.
❖ Marginal costing is an interesting area and not
something which can be left in choice. However, the
returns which you would get by solving around 200
problems is some extra 4 to 5 marks. This is because
a fully prepared student would secure 14 to 15 out of
those 20 marks and a student with smart preparation
can score around 10 marks.

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3 Theory and I have covered this in youtube and you can access the below
problems lectures to understand chapter 3 in detail
https://www.youtube.com/watch?v=TTh6A72xr8I&list=PL
NTx-1ClVxZI04yIGfk_2wUDWxwdIwsOI
4 Problems This is a simple area and you are going to continue with what
you would have learnt at IPCC level. Please solve the
questions available in question bank and the same should be
sufficient for this chapter. Focus should be more on concepts
and not quantity in this chapter
5 Problems I have covered this in youtube and you can access the below
lectures to understand standard costing in detail.
https://www.youtube.com/watch?v=o6LW5oAR9ik&list=
PLNTx-1ClVxZLYiGwlukr1aJqNqxd7yr6s
Note: My suggestion is not to do more problems in this area
as the weightage is only 8 marks but practice manual has
197 pages. You can straight away ignore practice manual.
Solve question bank (past exam questions) and go through
the videos
6 Problems This is continuation of IPCC level but this area has been very
tricky and questions are of high complexity level. Please do
practice manual and question bank
7 Problems This is one tricky area and extremely important from exam
point of view. Solve maximum problems in this area so that
you are well prepared for exam. Follow SM + PM + RTP + SA
for this area
8 Theory Go through source 1 or source 2
9 Theory Go through source 1 or source 2
10 Practical Operation research is going to be very important to improve
your score in the exam. This would come for around 35 to 40
marks (out of 120 marks) and you should attempt entire 40
marks in exam. Please follow this for chapter 10:
❖ Comprehensive simplex question from beginning to
end won’t be tested in exam as it takes around 45
minutes to solve it. Please see one question on
maximization and one question on minimization and
be prepared for that
❖ Formulation question would come from this area. See
SM + PM + RTP + SA for all formulation question.
This won’t take much time for preparation and
solving in exam
❖ Solve 2 problems each in graphical method
minimization and maximization
❖ Simplex interpretation – this is most important area
and students end up missing this. You can refer to
question no.2,3,4,5 and 6 to understand the various
interpretation questions of simplex (Topic 43)
Note: Please don’t waste time in solving more problems of
full simplex solution. You should focus more on
formulation, graphical and interpretation. You can solve
around 3 to 5 problems of formulation, graphical and
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interpretation for the amount of time spent on solving one
full simplex problem
11 Practical Solve SM + PM + RTP + SA for this area. Solving more
problems will give you confidence to answer this in exams.
Be clear with VAM and how to check for optimality
12 Practical Simple area. Solve SM + PM + RTP + SA
13 & 14 Practical Comprehensive area and you can do the following in this
area:
❖ Solve multiple problems on crashing as the same is
tested frequently in exams
❖ Draw network diagram for all questions given in SM
+ PM + RTP + SA. This will give you the confidence
and help you in drawing the correct network diagram.
Focus more on problems with alphabets and not
numbers
❖ Try 2 problems on calculating float. Don’t try float
calculation for all problems as that will lead to waste
of time
15 Practical Easy area but becomes difficult in exam if you are not clear on
what columns are to be created to solve a problem. Solve all
problems of PM + SM + RTP + SA
16 Practical Easy area and can give you around 5 marks in exams. Solve
all problems of PM + SM + RTP + SA
Key suggestions for preparation of AMA:
❖ Step 1: Please start with OR preparation. You should solve all problems of PM + SM
+ Question bank (RTP + SA). You can opt for some selective preparation in chapter
10, 13 and 14. Your aim should be to score more than 25 marks in OR
❖ Step 2: Prepare for direct theory and application theory question from source 1 or
source 2. This will help in competing paper
❖ Step 3: Do chapter 1 extensively. Please solve all problems of PM + SM + Question
Bank. This area can help you in scoring around 20 marks in exam. Every attempt,
questions have been tested from this area and students have been ignoring this
because it is perceived to be difficult
❖ Step 4: Focus on small areas like transfer pricing, operating costing, pricing decision
and budgetary control. Here also your focus would be on PM + SM + Question bank.
You can do selective preparation for budgetary control part
❖ Step 5: Start now with standard costing and marginal costing. Don’t try to solve
more problems in this area. You should try for around 30 good problems in each
standard costing and marginal costing. Quantity will not help as questions are not
going to be repeated in exam. So be aware of the basics and try to score around 15
out of 30 marks from these two areas. You can also leave the question in choice in
exam.
❖ You can easily score more than 60 marks in costing if you give importance to OR,
theory, chapter 1, transfer pricing, budgetary control, pricing decision and operating
costing. Try to complete the paper by answering question no.7 and 1 in quick time.
Do selective preparation for standard costing and marginal costing. 400 pages get
eliminated from PM if you do selective preparation for standard costing and
marginal costing
Important Links to connect with faculty:
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About the faculty:

❖ Dinesh Jain is a Chartered Accountant and is currently working in India’s premier
credit rating agency
❖ Rank holder in all three levels of Chartered Accountancy – CA Final (Rank 3), CA
IPCC (Rank 9) and CA CPT (Rank 24)
❖ He takes classes for both CA Inter and CA Final. Enriches student’s knowledge on
Cost Accounting and Str. Has an experience of eight years in teaching.
❖ Focuses extensively on conceptual clarity which has enabled multiple students
securing exemption in his subjects

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