Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Planning variances also learning curves and confusing things
- This topic has 10 replies, 3 voices, and was last updated 9 years ago by John Moffat.
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- June 2, 2013 at 3:11 pm #128272
Mr John!! Please!!! The exam is tomorrow, could you look at the below and help me better understand these:
First of all, I know very well how to calculate the labour cost under learning curves, yet there are plenty of places where you can make a mistake even though you know how to calculate it!
– For example, I notice that sometimes the question is saying : calculate the (avrage cost) does this mean that in this case I get the avg per unit and directly multiply it by the rate, no need to multiply the avrage itself by the number of units first and then multiply by the rate? I hope you got my point… I will clarify more if needed.
– On another question: They say for example, the learning curve ends after finishing the 100th… now I am really confused on what I should be assuming when they say that, what I learned is that when accountants prepare a budget, they include the labour cost of the units prepared AFTER the learning effect has gone, so we get the time/cost for the 100th unit and this will be our standard cost, and this is what I have done, yet when I see the answer, I see them calculating the fist 100 units using the longer time cost and then calculating the rest using the other cost, I am not sure which should I do!
Please can you make some sense out of the planning variances, I have a feeling they will come tomorrow in the exam and I have doubts about them… My problem is that in some questions they revise BOTH the quantity and the price, or for labours (the rate and the hours) and in other questions they revise only the time or only the rate and so on, I become confused… I am not able to see the logic that’s why, this is the ONLY variance in which I am memorising the formula and it is still not working… I know that when BOTH are revised this is how we calculate it:
For price/rate planning variance:
(revised quantity * budgeted rate) – (revised quantity*revised rate) and whether it is (A) or (F) that’s not a problem, I know.
For usage/efficiency planning variance
(revised quantity – budgeted quantity) * budgeted rate..Now my problem comes if they only revise the quantity, or only revise the price, how does the formula or the way change?
I am so so so sorry for this long question, tomorrow is the exam, very soon you will rest from our lengthy questions π Many thanks!!
June 2, 2013 at 5:11 pm #1282901) if they ask for the average then it will be the average per unit
2) Suppose you are preparing a budget when you expect to produce 150 units. For the budget you need to know how many hours it will take to produce those 50 units (so you can then get the labour cost).
If they say that after the 100th unit is produced, then the learning stops. Then you can calculate the total time for the first 100 using the learning formula. To get the total time for the next 50 you need to work out how long the 100th takes and then add on 50 units at that time.
Just make sure you read the question very carefully.3)For your planning variances, the formulae do not change at all. If they only revise the quantity, then then formulae are the same, but the revised rate and the original budgeted rate will be the same figure. If they only revise the price, then the revised quantity and the original budgeted quantity will be the same figure.
(Certainly you could get planning and operational tomorrow, but I think that mix& yield is maybe a bit more likely)
June 2, 2013 at 6:11 pm #128295I guess when I am asked to get the TOTAL cost I will need to make sure to calculate the first hundred or whatever number separately and then calculate the rest using the other time but if I am asked to prepare a standard cost card or in other words get the full cost per unit then I should be using the time for the 100th unit to account for that.
As for the planning variances, I think it is much clearer now, I will need to read it again and look at an example to make sure it is okay. I am good with mix and yield variances, yet I confuse the yield one a little bit, will review it quick now with the other things!
THANK YOU VERY MUCH!!! You have done a great job and for no return from us, this is very rare!
Maha
June 2, 2013 at 7:35 pm #128319You are welcome – and good luck with the exam π
June 3, 2013 at 3:58 am #128341Thank you! I hope the examiner will be nice today!!! π
June 3, 2013 at 4:56 am #128345π
June 3, 2013 at 5:12 am #128348AnonymousInactive- Topics: 0
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please clarify the rounding up rules. Is it always better to round up decimals or take the actual answer in calculations. and like to suggest a tutor to update f6 past paper answers to current tax rates, so that would help and save the time for other students. thanks!!!!
June 3, 2013 at 5:18 am #128351Hi chathu, I always round to to three decimal places but honestly, I do not know if this is the best thing to do, it does annoy me in learning curves when I get kind of a different answer because they have rounded it to more or less, I dk!
Anyways, I am replying to let you know that I have the last 4 exam papers for the ACCA taxation paper (UK) with updated answers, I can send them to you, no problem, do send me an email if you need, the exam is tomorrow, I do not think there is anytime for him to update!!June 3, 2013 at 7:36 am #128362I will ask the F6 tutor about the possibility of this. However. we always recommend that students buy one of the approved Revision/Exam Kits to practice as many questions as possible. In these the past exam questions have been updated to current tax rates.
June 8, 2014 at 8:08 am #175136You can use either budgeted or actual output.
Most textbooks use actual production because it is more sensible, but the examiner allows either (even though they give different answers).Variances do not get asked in Paper P5 π
Have you watched my free lecture on planning and operational variances?
June 8, 2014 at 8:08 am #175137You can use either budgeted or actual output.
Most textbooks use actual production because it is more sensible, but the examiner allows either (even though they give different answers).Variances do not get asked in Paper P5 π
Have you watched my free lecture on planning and operational variances?
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