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- July 16, 2024 at 5:10 am #708528
Problem 1 (March/june 2021) Question b) https://www.acowtancy.com/exams/acca-apm/cbe-question/jun-2021-genuine-q1?fsid=8891e25264fdd19e03ecf869d4b24a07148c7b35
The answer to this part has introduce a performance indicator for measuring the impact of significant import tariff : “The introduction of tariffs will increase the costs and can be measured at Fiag by the negative impact on profit margins.”. I want to ask in this scenario, is this performance indicator suitable to measure the impact of tariff as the profit margin can be affected by a number of factors such as tax allowances to citizens, economic growth, healthy lifestyle,… so this performance indicator does not separate the effects of tariff alone on profit margin. Therefore, i want to ask in this scenario, is this performance indicator suitable to measure the impact of tariff as the performance indicator must be SMART?July 16, 2024 at 3:26 pm #708559You are correct to say that there could be many influences on a company’s gross margin. Simply to blame all deterioration on the margin could be misleading. If I were writing an answer I would say something like “Assuming there are no other influences on the profit margin, we could assume that a deterioration is the direct result of import tariffs pushing up the cost of goods sold. The company should carefully consider if there are any confounding factors.”
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