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November 21, 2018 at 9:10 am
John, am I correct in thinking that the budgeted production levels are irrelevent in examples 1 & 2 of this topic?
Thanks for all these lectures by the way, they’re helpful for a bloke from Manchester studying in Australia!
John Moffat says
November 22, 2018 at 8:29 am
Yes, you are correct.
Just as with basic variances in the previous chapter, the expense variances are comparing actual costs with standard costs for the actual production (not the budgeted production).
November 22, 2018 at 8:54 am
That’s a great way of putting it John cheers.
I don’t suppose you have another succinct way of explaining efficiency/usage variances by any chance?
November 8, 2018 at 7:12 am
Thanks John. Well explained. Planning and operational variances are calculated for labour and materials making comparisons between the original budget and the revised budget.
November 8, 2018 at 7:14 am
Planning = original budget Vs revised budget Operational = actual performance Vs revised budget
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