Section A

EduCare NGO is audited on 'Value for Money' (the 3 Es). They recently negotiated a 15% discount on bulk purchases of textbooks without compromising the quality of the books. Which of the 3 Es does this achievement primarily demonstrate?

Answer options:

Economy

Efficiency

Effectiveness

Equity

How to approach this question

Match the action (getting inputs cheaper) to the correct 'E'. Economy = Input cost. Efficiency = Input/Output ratio. Effectiveness = Output/Objective achievement.

Full Answer

A.Economy✓ Correct

In Value for Money (VFM) analysis, Economy means obtaining inputs of the appropriate quality at the lowest price. Negotiating a discount on textbooks is a perfect example of Economy.

Common mistakes

Confusing Economy with Efficiency.

Question 30 All questions Question 32

Practice the full ACCA MA — Management Accounting Practice Exam 3

38 questions · hints · full answers · grading

More questions from this exam

Q01Section A GlobalHealth NGO is evaluating the effectiveness of its recent vaccination drive in ru...Easy Q02Section A Quantum AI, a tech startup, classifies its costs to better understand cost behavior. S...Medium Q03Section A MetroWater, a public utility company, uses sampling to test water quality. An automate...Easy Q04Section A AgriYield Corp is analyzing the relationship between the amount of specialized fertili...Medium Q05Section A TransGlobal Logistics uses time series analysis to forecast shipping volumes. The unde...Medium

View all 38 questions →