The following statements have been made about life cycle costing.
(1) Life cycle costing is needed in order to plan for the maximum length of commercial life for new products.
(2) Life cycle costing is particularly suited to businesses that manufacture products with long life cycles and who have significant research and development costs.
Which of the above statements is/are true?
The correct answer is: Neither 1 nor 2.
Life cycle costing does not have as an objective the maximisation of the commercial life of new products. Costs are estimated on the basis of the expected life of a product.
Life cycle costing is particularly suited to businesses that manufacture products with short life cycles and who have significant research and development costs.
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A government is trying to assess schools by using a range of financial and non-financial factors. One of the chosen methods is the percentage of students passing five exams or more.
Which of the three Es in the value for money framework is being measured here?
The following statements have been made about measuring performance in not-for-profit organisations:
(1) Output does not usually have a market value, and it is therefore more difficult to measure effectiveness.
(2) Control over the performance can only be satisfactorily achieved by assessments of ‘value for money’.
Which of the above statements is/are true?
The senior manager is suspicious of a local manager’s accounts and thinks that the profit performance may have been overstated.
Which of the following would be a plausible explanation of an overstatement of profit?
Which of the following statements regarding standard setting is correct?
When setting performance measurement targets it should be considered that there is the possibility that managers will take a short term view of the company and may even be tempted to manipulate results in order to achieve their targets.
Which of the following would assist in overcoming the problems of short-termism and manipulation of results?
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