Describe the three elements of VFM-新东方在线职业题库

新东方在线题库 > ACCA英国注册会计师试题 > F2 > Chapter20-22 > Describe t...

Describe the three elements of VFM

Chapter21Performancemeasurement

The value for money (VFM) concept has been developed as a useful means of assessing performance in an organisation which is not seeking profit. VFM concept revolves around the 3Es； as follows:

If you follow through the diagram above, you will see that, ultimately, VFM relates money spent to objectives achieved.

• Economy (an input measure) - measures the relationship between money spent and the inputs. Are the resources used the cheapest possible for the quality required?

• Efficiency (link inputs with outputs) - is the maximum output being achieved from the resources used?Effectiveness (links outputs with objectives) - to what extent to which the outputs generated achieve the objectives of the organisation.

多做几道

What does an adverse variable overhead efficiency variance indicate and what might be the cause?

Explain briefly the possible causes of

(i) A favourable material usage variance

(ii) A favourable labour rate variance

(iii) An adverse sales volume contribution variance.

What is the relationship between the labour efficiency variance and the variable overhead efficiency variance? Why might the monetary value be different?

Explain the meaning and relevance of interdependence of variances when reporting to managers.

A balanced scorecard measures performance 什om four perspectives: customer satisfaction, growth, financial success and process efficiency. Briefly explain these processes.