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performance measure

Forums › ACCA Forums › ACCA MA Management Accounting Forums › performance measure

  • This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 2, 2014 at 7:14 am #203193
    Shams
    Member
    • Topics: 16
    • Replies: 17
    • ☆

    Dear Sir:

    In the following question, as it is rather tricky, I tend to choose option d. Since part one shows effectiveness and cost of surgical procedure is likely to be economy related. However, I would like to have your kind advice in this regard.

    Thanks, Shams

    A hospital management team assess the hospital’s performance using the value for money criteria of efficiency, effectiveness and economy.
    1. The number of patients who need to be re-admitted following surgery.
    2. The staff cost of each surgical procedure.
    Which element of value for money criteria is assessed by each performance measure?
    a) 1 Economy 2 Efficiency.
    b) 1 Efficiency 2 Effectiveness.
    c) 1 Effectiveness 2 Efficiency.
    d) 1 Effectiveness 2 Economy.

    October 2, 2014 at 9:20 am #203226
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    Hi Shams

    1 is certainly effectiveness.

    For 2, efficiency would be better. The reason is that economy would be making sure that we did not pay too high salaries. However the amount attributed to one surgical procedure depends on how much time they take on the procedure and this is more a measure of efficiency.

    October 5, 2014 at 6:08 am #203518
    Shams
    Member
    • Topics: 16
    • Replies: 17
    • ☆

    Thank you Sir. The above explanation makes good amount of sense.

    October 5, 2014 at 8:28 am #203528
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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