Questions in this paper
Our own one-line description of what each question tests. "Paper" jumps to the question's page in the official PDF; "Comments" to the examiners' notes on it.
| Q | Area | What it tests | Marks | Pass rate | Official | Walkthrough |
|---|---|---|---|---|---|---|
| Q1 | MCQs | Seven MCQs (10 marks) on product cost elements, the abnormal loss entry, safety stock, CVP assumptions, a learning curve total, landed cost of an import and NRV-based joint cost allocation. | 10 | 47% | Paper Comments | Q1 walkthrough |
| Q2 | EOQ, safety stock and reorder levels | EOQ for a raw material where output yield, financing cost, variable and fixed storage, delivery charges and procurement costs must be sorted into ordering and holding costs. | 6 | 83% | Paper Comments | Q2 walkthrough |
| Q3 | Decision making and relevant costs | Maximum material price for a new product to hit a profit target, allowing for lost sales of existing products, freed labour hours, overtime above normal capacity, process loss and new supervisors. | 10 | 13% | Paper Comments | Q3 walkthrough |
| Q4 | Cost-volume-profit analysis | Two-product break-even sales and margin of safety for next year after price, volume, cost inflation and labour-hour reallocation changes. | 10 | 74% | Paper Comments | Q4 walkthrough |
| Q5 | Overhead allocation and absorption | Overhead allocation to three production departments with machine-hour and area bases, then reapportionment of two service departments by simultaneous equations. | 9 | 65% | Paper Comments | Q5 walkthrough |
| Q6 | Inventory valuation | Closing inventory for two products under FIFO with missing units, damaged units that can be sold as-is or repaired, post-year-end price rises and selling costs tied to sales value. | 9 | 25% | Paper Comments | Q6 walkthrough |
| Q7 | Marginal and absorption costing | Full marginal-costing profit and loss account for a single product with FIFO WIP equivalent units, stores consumption, part-fixed labour and mixed overheads. | 13 | 41% | Paper Comments | Q7 walkthrough |
| Q8 | Decision making and relevant costs | Make-or-buy for one of three components of an assembled product when labour is the binding constraint, using next year's inflated costs, plus non-financial factors. | 18 | 4% | Paper Comments | Q8 walkthrough |
| Q9 | Standard costing and variances | Variances for a two-material product under FIFO pricing: material price, mix and yield; variable overhead expenditure and efficiency; fixed overhead expenditure, efficiency and capacity. | 15 | 34% | Paper Comments | Q9 walkthrough |
Marks by area
All 100 marks set, by area. MCQ items count towards their own area.
Standard costing and variances15 marks
Marginal and absorption costing13 marks
Cost-volume-profit analysis11 marks
Inventory valuation11 marks
Joint and by-products2.5 marks
Labour costing and learning curve1.5 marks
Process costing1 marks
Heavier and lighter than usual
Compared with the average across all 2 indexed sittings of CAF-5 (differences of 5 marks or more).
Heavier
- Marginal and absorption costing: 13 marks vs 7.5 average
- Inventory valuation: 11 marks vs 5.5 average
Lighter
- Joint and by-products: 2.5 marks vs 8.8 average
Against the syllabus weightings
| Section | Syllabus weight | Spring 2026 marks |
|---|---|---|
| A. Costs associated with production | 35–45% | 35.5 |
| B. Cost flow (process, joint products, target costing, variances) | 20–30% | 18.5 |
| C. Cost management, planning and decisions | 30–40% | 46 |
Section totals use our classification of each question's area into the syllabus grid.
Pass rate by question
Published in the examiners' comments for this sitting.
Q1 · MCQs47%
What the examiners said
The main themes of the official examiners' comments, summarised in our own words. Read the full report for question-by-question detail.
- The overall result fell, mainly because of the 18-mark make-or-buy question (Q8), which only about 4% passed.
- First-attempt candidates did noticeably better (50%) than the overall figure, which the examiners attribute partly to the paper's move from CAF-3.
- Recurring errors: ignoring yields and normal losses when working out material needs, using the wrong apportionment basis for overheads, and computing variances that were not asked for.