ACCA Applied Knowledge · Management Accounting · Sources of data
A company wants to estimate the likely market share of a competitor's new product. Which source is MOST appropriate and is an external source?
Industry reports from a market research organisation are the best choice. Market share of a competitor's product is information that exists outside the company, so an external source is required, whereas the sales ledger, budgets and cost records only describe the company's own activities.
- AThe company's own sales ledger analysis by customer
- BThe company's budgeted sales forecast for next year
- CIndustry reports published by a market research organisationCorrect
- DInternal cost accounting records for its own products
Explanation
Information about competitors and market share lies outside the firm, so an external source is needed. Industry reports from a market research organisation provide this. The other options are internal records that say nothing reliable about a competitor's market position.
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