A company's sales in the last year in its three different markets were as follows:

 
$
Market 1 100,000
Market 2 149,000
Market 3 51,000
Total 300,000
In a pie chart representing the proportion of the sales made in each market,
what would be the angle of the section representing Market 3?
61 degrees
120 degrees
50 degrees
17 degrees

SUMMARISING AND ANALYSING DATA

a) Describe the two types of data: categorical (nominal and ordinal) and numerical
(continuous and discrete). [S]

Nominal
Categorical
Ordinal
Data
Discrete
Numerical
Continuous
Categorical data
 Nominal data are type of data that is used to label variables without providing any quantitative value. The
data cannot be ordered.
Example: Gender (0 = male, 1 = female)

 Ordinal data are a kind of categorical data with a set order or scale to it
Example: Consumer satisfaction (not satisfied, somewhat not satisfied, neutral, somewhat satisfied,
satisfied)

Numerical Data
 Discrete data are data which can only take on a finite or countable number of values within a given range.
 Example: Number of workers (100, 250, 1000)

 Continuous data are data which can take on any value

Example: Weight of flour materials (1.890 kgs)

b) Explain the terms descriptive analysis and inferential analysis

Descriptive analysis: Collecting, summarizing, and describing data
Example: What is the average of monthly electricity cost in 2020?

Inferential analysis: Drawing conclusions and/or making decisions concerning a population based only sample
data
Example: Is there any differences between electricity cost in Factory A and Factory B?

c) Calculate the mean, mode and median for ungrouped data and the mean for
grouped data. [S]
d) Calculate measures of dispersion including the variance, standard
deviation and coefficient of variation both grouped and ungrouped data

The number of daily complaints to a local government office has a mean of 12 and a
standard deviation of 3 complaints.
What is the coefficient of variation as a %?
 
 %

e) Calculate expected values for use in decision-making.[S]

f) Explain the properties of a normal distribution.[S]

g) Interpret normal distribution graphs and tables. [

The results of a chemistry examination are normally distributed with a mean score of
56 and a standard deviation of 12.
What is the percentage probability that a student will score more than 80?
 
 %

Which TWO of the following are feasible values for the correlation coefficient?
+ 1.40
 + 1.04
0
- 0.94

The following statements relate to the advantages that linear regression analysis has
over the high-low method in the analysis of cost behaviour:
 
(1) The reliability of the analysis can be statistically tested
(2) It takes into account all of the data
(3) It assumes linear cost behaviour
Which of the above statements are TRUE?
2 and 3 only
1 and 2 only
1 only
1, 2 and 3

h) Describe the five characteristics of big data (volume, variety, velocity, value and
veracity).[K]
i) Explain the three types of big data: structured, semi-structured and unstructured.
[K]
j) Describe the main uses of big data and analytics for organisations.

Identify whether each of the following statements about the uses of big data
analytics in organisations is TRUE or FALSE.
. True False
It helps to analyse the efficiency of business processes in real time
It helps to better understand customer behaviour and preferences

Which of the following statements concerning Big Data analytics is correct?

 Big Data analytics relies on digital information
 Big Data analytics relies on written information
 Big Data analytics relies on verbal information
 Big Data analytics relies on confidential information

Big Data
LO:
a) Describe the five characteristics of big data (volume, variety, velocity, value and veracity)
b) Explain the three types of big data: structured, semi-structured and unstructured

Volume: organisations now hold huge volumes of data

Example:
 Social media companies, such as Facebook, will have a data store of all the postings an individual makes
(and where they were made), photos posted and contacts
 A supermarket will have a data store of all purchases made, when and where they were made, how they
were paid for and the use of coupons via loyalty cards swiped at the checkout

Variety: Big Data can include much more than simply financial information and can include other
organisational data which is operational in nature as well as other internal and external information. This data
can be both structured and unstructured in nature
 Structured data – for example, a bank will hold a record of all receipts and payments (date, amount and
source) for a customer.
 Unstructured data – can make up 80% of business data but is more difficult to store and analyse

Velocity: The data must be turned into useful information quickly enough to be of use in decision making and
performance management (in real time if possible). The sheer volume and variety of data makes this task
difficult and sophisticated methods are required to process the huge volumes of non-uniform data quickly

Veracity: The data must be accurate and reliable enough.

Value: Having access to big data is all well and good but that’s only useful if we can turn it into a value

LO:
c) Describe the main uses of big data and analytics for organisations
The processing of Big Data is known as Big Data analytics. For example, Google Analytics tracks many
features of website traffic

Big Data is relevant to management accountancy in a number of ways, such as:

 It can help the organisation to understand its customers’ needs and preferences which can then be used
to improve marketing and sales.
 It can improve forecasting, for example of future customer spending or of machine replacement cycles, so
that more appropriate decisions can be made.
 It can help the organisation to automate business processes resulting in improved efficiency.
 It can help to provide more detailed, relevant and up to date performance measurement
Learning outcomes:
a) Calculate the mean, mode and median for ungrouped data and the mean for grouped data

Mean
The arithmetic mean, also known as the ‘average’, is calculated by dividing the sum of the values in question by
the number of values

A shopkeeper is about to put his shop up for sale. As part of the details of the business, he wishes to quote the
average weekly sales. The sales in each of the last 6 weeks are:
Week 1 2 3 4 5 6
Sales $1,120 $990 $1,040 $1,030 $1,105 $1,015
Determine the mean weekly sale.

The following distribution shows the number of employees absent per day for a company over a 22 day period.
No of employees absent No. of days (frequency)
2 2
3 4
4 3
5 4
6 3
7 3
8 3
Find the arithmetic mean for the above distribution

Median
The median is defined as the middle of a set of values, when arranged in ascending (or descending) order. The
median can be used to overcome any issues of skewed data.

The previous illustration we saw that a shop's weekly sales were given by the following sample over six weeks.

Week 1 2 3 4 5 6
Sales $1,120 $990 $1,040 $1,030 $1,105 $1,015

The sample has an arithmetic mean of $1,050. A prospective buyer of the business notices that the mean is
higher than the sales in four of the 6 weeks.
Calculate the median for him

Mode
The mode or modal value of a data set is that value that occurs most often.

Find the mode for the following distribution:

Complaints per week No of weeks
0 5
1 12
2 7
3 2
4 1

Learning outcomes:
b) Calculate measures of dispersion including the variance, standard deviation and coefficient of variation both
grouped and ungrouped data

Standard deviation
The standard deviation (σ) is a way of measuring how far away on average the data points are from the mean.
They measure average variability about the mean.
Ungrouped data

Find the standard deviation of each class:

FA Score (Class A) FA Score (Class B)
40 10
50 20
50 50
60 80
60 80
60 90

Grouped data

Coefficient of variation
The coefficient of variation is a statistical measure of the dispersion of data points in a data series around the
mean.

Learning outcomes:
c) Calculate expected values for use in decision-making

An expected value is a weighted average value of the different possible outcomes from a decision, where
weightings are based on the probability of each possible outcome

Expected values indicate what an outcome is likely to be in the long term if the decision can be repeated
many times over.

Example 1:
Merry joins a gamble by tossing a coin. Merry will get Rp100.000 if the coin toss result in head. However, if the
coin toss result in tail, Merry need to pay Rp50.000. What is the expected value?
Head (Kepala) / Tails (Ekor) = 50:50

Merry gets 100.000 kalau head

Merry pays 50.000 kalau tail

Expected value?

Outcome Probability Outcome x Probability

Muncul Head 100.000 50% 50.000
Muncul Tails -50.000 50% -25.000
Expected value 25.000

Example 2:
A company has recorded the following daily sales over the last 200 days:
Daily sales (units) Number of days
100 40
200 60
300 80
400 20
What will be the expected sales level in the future? 240 units

Daily sales (units) Number of days Probability Daily sales x Prob

100 40 40/200 = 0,2 20
200 60 60/200 = 0,3 60
300 80 80/200 = 0,4 120
400 20 20/200 = 0,1 40
200 1 240

Example 3:
An entity must make a decision between three options, A, B and C. The possible profits and losses are:
1. Option A: a profit of $2,000 with probability 0.5 or otherwise a loss of $500
2. Option B: a profit of $800 with probability 0.3 or otherwise a profit of $500
3. Option C: a profit of $1,000 with probability 0.7, or $500 with probability 0.1 or otherwise a loss of $400
Using EV, which option should be chosen? Option A

Option A
Outcome Probability Outcome x probability
2.000 0.5 1.000
-500 (1-0.5) = 0.5 -250
Expected value 750

Option B
Outcome Probability Outcome x probability
800 0.3 240
500 (1-0.3) = 0.7 350
Expected value 590

Option C
Outcome Probability Outcome x probability
1.000 0.7 700
500 0.1 50
-400 (1-0.7-0.1) = 0.2 -80
Expected value 670

Learning outcomes:
d) Explain the properties of a normal distribution

A normal distribution has the following characteristics:

 the mean (μ) is shown in the centre of the diagram
 the curve is symmetrical about the mean. This means that 50% of the values will be below the mean and
50% of the values will be above the mean.
 the mean, median and mode will all be the same for a normal distribution

The total area under the curve is equal to 1.

In general 68% of values are within one standard deviation (between –1 and 1), 95% of values are within two
standard deviations (between –2 and 2) and 99.7% of values are within three standard deviations (between –3
and 3).

Learning outcomes:
e) Interpret normal distribution graphs and tables

RST is a food producer, specialising in dried fruit and nuts. The dried fruit and nuts are prepared within the
factory and packed into small bags which are sold as snacks in supermarkets.
The weights of the snack bags are normally distributed with a mean weight of 70g and a standard deviation of
5g.
RST can use normal distribution to calculate the probabilities that a bag selected at random would be of an
acceptable weight.
The food producer would like to know the probability that the bag selected at random weighs less than 60g

Step 1: Calculate z-score

Z-score is a standard normal distribution which has a mean of 0
a standard deviation of 1.

z is the z score
x is the value being considered
μ is the mean
σ is the standard deviation

60−70 −10
z= = =−2
5 5
Step 2: Looking up the normal distribution tables
Therefore, the probability that a bag selected at random weighs less than 60g = (0.5 – 0.4772) = 0.0228 or 2.3%.

Exercise:
A machine produces components with diameter of mean 5 cm and standard deviation 0.1 cm. The production of
this component follows a normal distribution.
What proportion of the components produced will have diameters of the following dimensions?
1) between 5 and 5.2 cm
2) over 5.15 cm
3) between 4.8 and 5.1 cm

A class has score of Accounting exam with a mean of 75 and a variance of 100. 1)
1) What is upper quartile of this distribution? (i.e What is the minimum score to be best 25% in this class?)
2) What is the minimum score to be best 10% in this class?