managerial device to determine effeciency and effectiveness of cost performance
Answers
Explanation:
The effectiveness and efficiency are two different things. Efficiency refers to the quality of the internal operations of the organisation, while effectiveness refers to the organisation's impact on end users. First you will need to set objectives for effectiveness and for efficiency, then work out what indicators you can use to assess the extent to which those objectives have been met. Then decide what data to collect to measure those indicators. And you will need baseline data for each indicator, ideally from before the strategic management accounting was implemented (sometimes this kind of data can be collected retrospectively from existing records) or, failing that, from as soon as possible after it was implemented. This baseline will be used as a benchmark to assess progress against.