Variance Analysis Example 3

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  1. Avatar of maazalimughal maazalimughal says:
    December 10, 2012 at 7:36 pm

    Thank you sir you helped me alot in all the topics of FMA!!!
    I am going to give my CBE on 13th of December, and I hope I em going to pass it with flying colors just because of your lectures.. :)
    HATS OFF to you !!

  2. Avatar of ryanpieblock ryanpieblock says:
    November 8, 2012 at 10:51 pm

    Dear Sir , when you have valued closng inventories…. it was @ standard cost….
    there has been an impact on the profit…
    y it is the question still going smooth????
    is there any logic behind????

    • Avatar of johnmoffat johnmoffat says:
      December 11, 2012 at 8:42 am

      @ryanpieblock, In management accounting we always value the inventory at standard cost. The reason is that the management accountant will usually be doing statements monthly and it will be silly to keep valuing the inventory differently just because some months we spent a more than we should have, and some months we spent less than we should have.
      This is different than the financial accounts (because in financial accounts inventory will be valued at actual cost) but we are not doing financial accounts.

      In practice the standard cost might well be changed during the year, but not for Paper F2.

  3. Avatar of Miss A.. Miss A.. says:
    October 8, 2012 at 1:02 am

    Dear Sir,I can’t get why is sales price variance ‘ adverse’ in the above example??

    shouldn’t it be favourable…??
    because actual sales at actual Selling price ……..$613200
    actual sales at standard selling price………………..$630000

    actual results are lower than expected.Shouldn’t it be favourable because it is saving cost??

  4. Avatar of allamardneket4 allamardneket4 says:
    April 16, 2012 at 6:18 am

    In operating statement the final profit comes 38660? not 37808..why?/

  5. Avatar of johngovment johngovment says:
    January 19, 2012 at 1:25 am

    To make sales budget how do i determine that demand in terms of new business where there is no previous data ?

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