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.

最新试题

该科目易错题

该题目相似题

Bytes Limited operates an IT consultancy business and uses a coding system for its elements of cost (materials, labour or overheads) and then further classifies each element by nature (direct or indirect cost):Element of cost Code Nature of cost CodeMaterials A Direct 100 Indirect 200Labour B Direct 100 Indirect 200Overheads C Direct 100 Indirect 200What would the codes be for the following costs? Cost CodeSalary of trainee IT consultant Planning costs to renew lease of the office Wages of the office manager Cleaning materials used by cleaner
P Harrington is a golf ball manufacturer. Classify the following costs by nature {direct or indirect) in the table below. Cost Direct IndirectMachine operators wages Supervisors wages Resin for golf balls Salesmen's salaries
George pic makes stationery. How would he classify the following costs?Cost Production Administration DistributionPurchases of plastic to make pens Managing director's bonus Depreciation of factory machinery Salaries of factory workers Insurance of sales team cars
Which method of inventory valuation is being described?Characteristic FIFO LIFO AVCOPotentially out of date valuation on issues. The valuation of inventory rarely reflects the actualpurchase price of the material. Potentially out of date closing inventory valuation. This inventory valuation method is particularly suitedto inventory that consist of liquid materials e.g. oil. This inventory valuation method is particularly suitedto inventory that has a short shelf life e.g. dairy products. This inventory valuation method is suited to a wheat farmerwho has large silos of grain. Grain is added to and taken fromthe top of these silos. In times of rising prices this method will give higher profits. In times of rising prices this method will give lower profits. In times of rising prices this method gives a middle level ofprofits compared to the other two. Issues are valued at the most recent purchase cost. Inventory is valued at the average of the cost of purchases. Inventory is valued at the most recent purchase cost.
State two advantages and two disadvantages of a flexible budget.
Explain what is meant by standard costing
What is the relationship between the labour efficiency variance and the variable overhead efficiency variance? Why might the monetary value be different?
Discuss one potential problem that might be experienced as a result of using ROI to appraise the performance of the divisions.Recommend one alternative performance measure that could be used to address this problem.
Briefly discuss the strengths and weaknesses of ROI and Rl as methods of assessing the performance of divisions.
Explain two factors that should be considered when designing divisional performance measures.