The following statements have been made about material price planning variances:
(1) The publication of material price planning variances should always lead to automatic updates of standard costs.
(2) The causes of material price planning variances do not need to be investigated by managers at any level in the organisation.
Which of the above statement(s) is/are true?
Statement 1 is not true: the publication of material price planning variances should not always lead to automatic updates of standard costs. There must be a good reason for deciding that the original standard cost is unrealistic.
Statement 2 is not true either. Although planning variances are not usually the responsibility of operational managers, these variances do need to be investigated by senior management when they are substantial, so that lessons may be learned for the future.
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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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