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ACCA Applied Knowledge · Management Accounting · Sampling methods

A cost accountant wants to estimate the average time taken to process invoices. Invoices come from four departments of very different sizes and processing times. Which is the main advantage of using stratified random sampling rather than simple random sampling?

The main advantage is that stratified random sampling reduces sampling variability by guaranteeing each department is represented, which improves precision when departments differ greatly. It still requires a sampling frame and knowledge of the population, and it does not rely on interviewer choice.

  1. AIt removes the need for a sampling frame
  2. BIt reduces sampling variability by ensuring each department is representedCorrect
  3. CIt is cheaper because the sample can be chosen without any knowledge of the population
  4. DIt eliminates all bias because the interviewer chooses the items

Explanation

Stratification ensures each subgroup is represented in proportion, which improves precision when the groups differ markedly. It still needs a sampling frame and knowledge of the population structure. Selection by the interviewer would introduce bias, not remove it.

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