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Hello
I am looking at q1, part2 which states:
Evaluate the introduction of the two measures of revenue and operating profit per square metre, as requested by the CEO.The answer mentions that while floor space is definitely important, it does not consider all the resources which the business could use and lists employee costs as one of them.
My question:
Since this question asks for an evaluation, how deep should i go into answering? Should i list out some more resources and give my reason? I notice the answer just mentions employee costs, sales volume and margin.Also, when i read the question initially, i got the impression that they wanted and evaluation of revenue per square foot and also an evaluation of operating profit per square foot. Now that i’m looking at the answer i can see that’s not what was required. How can i prevent myself from misunderstanding questions like this?
Links:
https://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/p5/j16_hybrid_P5_q.pdfhttps://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/p5/JJ16_Hybrid_P5_Ans.pdf
Evaluation is making a judgement: you should try to find both good points and bad points and produce a balanced, constructive evaluation. I think the answers to parts (i) and (ii) do that. If you see other shortcomings not mentioned in the answer you would have been given credit.
Nothing will guarantee that you do not misunderstand question requirements. A common error is where the examiner asks for a performance report to be evaluated (ie its content and layout) not the performance itself. You just have to read the requirements as carefully as possible then become fully committed to your interpretation. Note that you will not know you are off target until you see the examiner’s answer, so you might as well answer whole-heartedly based on your interpretation.
Hi Ken, for March/June 2016 Q1 (iii), can you explain the sample answer in another way? Because i could not really understand it……..
It is simply saying that RI is a good way to appraise investment centres as it takes into account the capital needed to make the profits through a notional interest charge (ordinary RI calculation). However, this could still induce managers not to invest in new machinery because of the capital employed rises, the imputed interest rises and the RI falls.
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