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ACCA Applied Knowledge · Management Accounting · Sources of data

Ridge Co wants to estimate next year's labour cost per hour for budgeting. Which of the following would be the most appropriate INTERNAL source of data?

Payroll records showing actual wage rates paid are the internal source, because they are produced within Ridge Co. Government statistics, recruitment agency surveys and competitor annual reports all come from outside the company and are therefore external data.

  1. AGovernment statistics on national average wage inflation
  2. BA recruitment agency's salary survey
  3. CPayroll records showing actual wage rates paid to employees this yearCorrect
  4. DA competitor's published annual report

Explanation

Payroll records are generated within Ridge Co and show actual rates paid, making them the internal source. Government statistics, agency surveys and competitor reports all originate outside the company and so are external, even though they may be useful for adjusting for expected inflation.

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