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ACCA Applied Knowledge · Management Accounting · Sampling methods

A firm has 10,000 employees: 8,000 in production and 2,000 in administration. It wants views on a new bonus scheme from both groups. Which is the main advantage of using stratified sampling rather than simple random sampling?

The main advantage is that stratified sampling ensures each group, here production and administration, is represented in proportion to its size. This improves accuracy compared with simple random sampling, though it still needs a sampling frame and does not eliminate sampling error.

  1. AIt removes the need for any sampling frame
  2. BIt is the cheapest method because strata need not be identified
  3. CIt ensures each group is represented in proportion to its sizeCorrect
  4. DIt guarantees a zero sampling error

Explanation

Stratified sampling divides the population into groups (strata) and samples from each, usually in proportion to size, so that all groups are represented. Here the sample would be 80% production and 20% administration. It still needs a frame and information to form the strata, so it is not cheapest, and sampling error is reduced but not eliminated.

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