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Please can any one explain me how the calculations are performed in this benchmarking question? I tried but i could not understand???
How these figures are calculated???
GU AU BU
$ $ $
Research
contract management 78 87 97
laboratory management 226 257 281
Teaching facilities management 951 1,197 920Contract management: driver = contract value
14,430/185 = 78; 14,574/167 = 87; 14,719/152 = 97
Lab management: driver = contract value
41,810/185 = 226; 42,897/167 = 257; 42,646/152 = 281
TFM: driver = student numbers
26,993/28394 = 951; 27,263/22, 783 = 1,197; 26,723/29,061 = 920
Thank you for your explanations! Can you please advise why did not you take into account that we shall divide millions over millions?
I was calculating taking into account that 185 is actually in millions, and my answer was $14,430,000/$185,000,000=0.078 dollars. Sorry, if I asked a silly question, I really got stuck with this.In the ACCA answer, just after the table in part (b) it says:
Research categories are considered per $000 of contract value supported.
So multiply your figures by 1000 to get agreement. This is not an essential part of the solution.
Dear Ken,
I have understood the calculation but unable to understand the results.
The value of $78 is derived by $14,430/$185m. What is the interpretation of $78 in the analysis of Benchmarking?
So, $78 is the total cost of contract management divided by contract research value. So I would think that the lower the better as that implies greater efficiency in managing research contracts. As it says in the Kaplan answer: “From the results, it can be seen that GU is best at controlling costs associated with research contracts and it has the highest research funding. ……”
The $78 is the total cost of the contract.
Then how can we differentiate between the total spending of $14,430,000 and Funding amount of $185 million?
Hi Ken,
The passage from the question says’ The Key drivers of cost and revenues have been assumed to be research contract values supported, student numbers and total staff numbers’
How are we supposed to know what driver to use for each administrative cost? Looking at the answers i can see how they calculated each figure, but how they determined what driver to use.
Thanks in advance.
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