Question 1

SECTION B - MULTI-TASK QUESTION 3 (PERFORMANCE MEASUREMENT)

Scenario: GlobalCare is an international NGO providing disaster relief. Management is evaluating the performance of its recent 'Clean Water Initiative' using both financial and non-financial metrics, as well as the Value for Money (VFM) framework.

Data for the initiative:
- Total funds raised: $5,000,000
- Fundraising costs: $500,000
- Water purification kits purchased: 100,000 kits
- Total cost of kits: $3,000,000
- People provided with clean water: 400,000 people

Based on the scenario, answer the following 5 sub-tasks.

Task 1: Calculate the fundraising efficiency ratio (Fundraising costs as a percentage of Total funds raised).
Task 2: Calculate the cost per water purification kit purchased.
Task 3: Calculate the cost per person provided with clean water (using the cost of kits).
Task 4: Under the VFM framework, which 'E' is demonstrated by negotiating a 10% bulk discount on the purchase of the water kits?
Task 5: Under the Balanced Scorecard, in which perspective would 'Number of volunteers trained in water purification' be placed?

Accepted Answer

Perform basic ratio analysis for Tasks 1-3. Apply VFM definitions for Task 4. Apply BSC definitions for Task 5.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

For Task 3, dividing the number of people by the cost instead of cost by people. For Task 4, confusing Economy with Efficiency.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 5

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