Comments

  1. avatar says

    Dear Sir,
    I haven’t understand the calculation part of the Sales Volume Variance. Was it the planning and operational sales variance calculation? The approach on the video is too direct for me to grasp what happened. Can you enlighten me a little bit.

    Thanking you for your help.

    • Avatar of johnmoffat says

      The sales volume was budgeted at 1000 units, but was actually 960 units – a fall of 40 units.

      However the market declined by 10% and so we would have expected a fall of 100 units to 900 units (effectively a planning variance), we actually sold 960 which is 60 better than we would have now expected (effectively an operational variance).

      For both variances, we cost them out at the standard contribution per unit, as always.

  2. Avatar of johnmoffat says

    I will do when I have time.
    (Although those questions were both set by the previous examiner, and Stay Clean in particular was very difficult).
    A better question that is more representative of the current examiner is December 2011 Question1.

    • Avatar of Mahoysam says

      I am really glad that you think Stay Clean was difficult because I solved it yesterday and I thought it was easy or at least fine, that means I am fairly prepared!!! I got most of the answer correct but I was disappointed when I looked at the answer because I found them only calculating the negative side when there were avoidable costs to be calculated which represent the “bright side” of the decision… I thought the approach of such questions is to calculate the negative (loss) and the positive (avoidable costs in other words benefits) then compare, I am not sure why they only calculated the losses and the concluded that we should not make this decision as it will result in a negative outflow!

  3. avatar says

    thank you very much!very helpful!
    Could you please upload(when you are able) the solutions of Question : STAY CLEAN (DEC 09 EXAM) AND BITS AND PIECES (JUNE 09 EXAM) ,on relevant costing?
    its a quite demanding and difficult topic for many students and it would be really very helpful to see some more on this..especially when the questions have lots to remember and take on consideration…
    thanks a lot!!

    • avatar says

      I feel better to hear that.Because i found it very difficult to solve.(indeed).
      Thank you very much for your immediate reply.
      I believe it will be very helpful for all of us.
      So if you are able upload this one!
      Thanks a lot!!!

Leave a Reply