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Dec 2016 Exam – Question 12

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Dec 2016 Exam – Question 12

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by MikeLittle.
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  • February 23, 2017 at 4:12 pm #373871
    abeckman
    Member
    • Topics: 6
    • Replies: 5
    • ☆

    A local authority department is responsible for waste collections. They have an annual budget to provide a regular collection service from households in the local area. The budget was increased to enable the department to increase the percentage of waste disposed of in an environmentally friendly manner.

    Which of the following is the best measurement to justify the increase in the budget?

    a. An increase in the number of collections made during the period
    b. The percentage of waste recycled rather than being placed in landfill sites
    c. The fair value of the machinery used in making the collections
    d. A breakdown of expenditure between the cost of making collections and the cost of processing waste

    Correct answer is B

    Could you please clarify? I got confused with this question and there is no additional explanation on the answer.

    Thanks a million

    February 23, 2017 at 4:23 pm #373877
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Option a) – just because we increase the number of collections does not mean that we are becoming more environmentally friendly – quit the opposite, actually! There’s going to be an increase in fuel costs and carbon monoxide exhausts

    Option c) – I cannot imagine how the fair value of the machinery acquired could possibly justify the increase in the budgeted expenditure

    Option d) – how could a sub-analysis of additional costs / budget increase be at all helpful in justifying that increase

    There really is only one sensible option and that is option b

    OK?

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  • The topic ‘Dec 2016 Exam – Question 12’ is closed to new replies.

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