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ACCA Applied Knowledge · Management Accounting · Performance measurement - overview

A charity spent $240,000 on a literacy programme. It ran 120 classes and 1,800 adults attended in total, of whom 900 reached the target reading level. Which figure is a measure of effectiveness?

The proportion of attendees reaching the target reading level, 50% (900 out of 1,800), measures effectiveness because it shows whether the programme achieved its objective. The other figures relate cost or attendance to classes or adults, so they describe efficiency or output rather than achievement of objectives.

  1. A$200 cost per adult attending
  2. B$2,000 cost per class
  3. C15 adults attending per class
  4. D50% of attendees reaching the target reading levelCorrect

Explanation

Effectiveness compares results with objectives: 900/1,800 = 50% reaching the target level. Cost per class and cost per adult relate to inputs and outputs (efficiency/economy). Attendance per class (1,800/120 = 15) is an output measure.

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