ICAEW Business Insight and Performance: What It Covers and How to Prepare

Business Insight and Performance (BIP) is the ACA Certificate Level module about management information: what products cost, how budgets are built, why results differ from plan and which decision makes the business better off. It replaced Management Information when ICAEW launched the Next Generation ACA in September 2025, and it adds more on data, technology and the external environment. It is a 2-hour exam with a 55% pass mark. Everything below about the exam and syllabus comes from ICAEW's 2025–2026 syllabus handbook.

The Exam

80% of the marks: 32 multiple choice, multi-part multiple choice or multiple response questions across the whole syllabus.
20% of the marks: one scenario-based question on a single syllabus area. It will be costing and pricing, budgeting and forecasting, performance management, or management decision making.

Timing: 120 minutes for 100 marks is 1.2 minutes per mark, so about 24 minutes for the scenario and 96 minutes for the 32 objective questions (3 minutes each). The scenario can only come from four areas, so make sure you could handle a 20-mark question on any of them.

What the Syllabus Covers

Costing and pricing (20%): cost classification, absorption and marginal costing and the reconciliation between them, cost-based pricing, price elasticity, and transfer pricing.
Budgeting and forecasting (20%): high-low and time series, data analytics in forecasting, preparing budgets, top-down and bottom-up approaches, zero-based and incremental budgeting, cash budgets, the operating cycle and working capital.
Performance management and the external environment of business (25% together): differences between actual and budget or standard, analysed into price and volume effects, with likely reasons; macro-economic factors and the effect of national and international regulation.
Management decision making (20%): breakeven, contribution and margin of safety, limiting factors, and NPV, IRR, payback and accounting rate of return.
Technology and data analysis (10%): types and sources of data, sampling, data errors and protection, spreadsheets and visualisations, and the effect of automation and AI on the profession.
Ethics (5%): ethical issues in preparing and presenting management information, including data bias.

Worked Examples of the Core Calculations

Absorption versus marginal costing

Fixed production overhead is absorbed at £4 per unit. In the period, 10,000 units are produced and 9,000 are sold, so inventory rises by 1,000 units.

Absorption costing carries £4 × 1,000 = £4,000 of fixed overhead forward in closing inventory, so absorption profit is £4,000 higher than marginal costing profit. If inventory had fallen, absorption profit would be lower. Questions give you one profit and ask for the other; the distractors reverse the sign or use the total change in inventory value instead of only the fixed overhead in it.

High-low method

Total costs were £18,000 at 2,000 units and £24,000 at 3,500 units.

Variable cost per unit: (£24,000 − £18,000) ÷ (3,500 − 2,000) = £4.
Fixed cost: £18,000 − (2,000 × £4) = £10,000.
Forecast at 3,000 units: £10,000 + £12,000 = £22,000.

Always pick the highest and lowest activity levels, not the highest and lowest costs.

Breakeven and margin of safety

Selling price £25, variable cost £15, fixed costs £60,000, budgeted sales 8,000 units.

Contribution per unit: £10. Breakeven: £60,000 ÷ £10 = 6,000 units.
Margin of safety: 8,000 − 6,000 = 2,000 units, or 2,000 ÷ 8,000 = 25% of budgeted sales.

Limiting factor

Product A earns £12 contribution and uses 3 labour hours; product B earns £10 and uses 2 hours. Labour is scarce.

A: £12 ÷ 3 = £4 per hour. B: £10 ÷ 2 = £5 per hour.
Make B first, up to its demand, then use the remaining hours on A.

The classic wrong answer ranks by contribution per unit, which would put A first.

Price and volume differences

The standard for material is £5.00 per kg. For the actual output, the standard quantity is 5,000 kg. The business bought and used 5,200 kg for £27,040.

Price: actual price £27,040 ÷ 5,200 = £5.20; (£5.20 − £5.00) × 5,200 = £1,040 adverse.
Usage: (5,200 − 5,000) × £5.00 = £1,000 adverse.
Total: £2,040 adverse, which equals £27,040 − (5,000 × £5).

The syllabus also asks for possible reasons. Cheaper, lower-grade material could explain a favourable price difference alongside an adverse usage one. Think about how the two variances might be connected rather than explaining each one separately.

Net present value

A project costs £100,000 now and returns £30,000 a year for four years. The cost of capital is 10%; the four-year annuity factor at 10% is 3.170.

Present value of inflows: £30,000 × 3.170 = £95,100.
NPV: £95,100 − £100,000 = −£4,900, so reject on financial grounds.
Payback: £100,000 ÷ £30,000 = 3.33 years, which looks acceptable on its own. That is why exam questions ask which method should take priority: NPV, because it measures the increase in value.

How to Prepare

1. Build the calculations first. Costing, budgeting, variances and decision making make up most of the marks and are where the scenario question comes from. Work through each technique until you can do it without notes.
2. Then the explanations. For every technique, be able to say what it is for and what its limitations are. Objective questions often test this rather than the arithmetic.
3. Do not skip technology, data and ethics. Together they are 15% of the syllabus, and they are quick marks once learned: types of data error, sampling methods, correlation versus causation, data bias.
4. Practise one 20-mark scenario a week from your study material, timed at 24 minutes, rotating through the four possible areas.
5. Drill objective questions by chapter, then in mixed sets. Our free Business Insight and Performance question bank covers costing, budgeting, performance management and decision making, and the ICAEW daily challenge mixes it with the other Certificate Level modules.

If you are deciding when to sit BIP, see our guide to the order of the Certificate Level exams. All our ICAEW material is on the ICAEW hub.

FAQs

Is Business Insight and Performance the same as Management Information?
It is the successor module, but not the same. The core costing, budgeting and decision-making techniques remain, with more on data, technology, the external environment and sustainability. Check older materials against the current syllabus.

What is the BIP pass mark?
55%.

How long is the exam?
2 hours.

What is in the 20-mark question?
A scenario on one of four areas: costing and pricing, budgeting and forecasting, performance management, or management decision making.

Do I need a scientific calculator?
Check ICAEW's current exam instructions for the permitted calculator rules before exam day.

Sources

ICAEW, Next Generation ACA Syllabus Handbook 2025–2026, Business Insight and Performance (module aim, method of assessment, specification grid, learning outcomes)
ICAEW, Business, finance and accountancy exams (Certificate Level duration and pass mark)
ICAEW, ICAEW launches Next Generation qualification