Joanna Smith has recently purchased an accounting practice in a large provincial city.  Although her decision was based on wanting to make a tree change in her life, she also wants to make her new business much more successful that it has been in the past.

When she purchased the business, one of the factors that stood out was the relatively small amount of profit that the business had made from providing taxation and business advice to their current clients.

In her previous position with a large metropolitan accounting practice, Joanna had always identified 3 different categories of clients.

Clients needing taxation advice only

Clients needing business advice only

• Clients needing both taxation advice and business advice

Joanna would like to identify the breakdown of this new firm's clients into these 3 categories.

She plans to use this information to make a range of decisions going forward that could involve the purchase of additional computer software as well as using this information when hiring extra staff that will be needed to expand the business.

Joanna examines the client records for the 1250 clients that the business currently services. She found:

530 clients use taxation advice services only

320 clients use business advice services only

400 clients use both taxation advice and business advice services

Joanna is aware that when we are presenting statistical information that involves separate categories, there are 2 graphs that are often used for analysis.  The 2 types of graphs are column or bar charts and pie charts.

Joanna needs to present a report to the board of directors tomorrow, so she asks her assistant to prepare a column chart and a pie chart to show the breakdown of the clients into the 3 categories.

Required:

a. Identify one (1) problem with the column chart done by Joanna's assistant. 

b. In the space below, draw a more accurate representation of what the chart should look like. 

(A reasonable but correct sketch with labels is all that is required).

Transcribed Image Text:

550 500 450 400 350 300 250 Hours spent on advice Taxation & Business Taxation only Business only 550 500 450 400 350 300 250 Hours spent on advice Taxation & Business Taxation only Business only