• Skip to primary navigation
  • Skip to main content
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA PM:
  • PM Notes
  • PM Lectures
  • Practice Questions
  • PM Flashcards
  • Revision Lectures
  • PM Mock Exam
  • PM Forums
  • Ask the Tutor

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Planning and Operational variances (part 1) – Variance analysis – ACCA Performance Management (PM)

Reader Interactions

Comments

  1. sashafarah says

    January 24, 2023 at 11:13 am

    Hi, I’m sitting this exam in March 2023. Is this still the best method to use currently?

    You’re very good at making complicated things easy to understand so thank you!

    Log in to Reply
    • sashafarah says

      January 24, 2023 at 11:14 am

      sorry i posted it twice as it said I had already written a comment like this on my previous post!

      Log in to Reply
  2. sashafarah says

    January 24, 2023 at 11:12 am

    Hi, firstly thank you so much for your lectures. You clearly have done this for many years and therefore are able to make things SO clear when you explain them down to the words you choose and the way you break things up so well.

    I’m sitting this exam in March 2023. Is this still the best method to use currently?

    Thanks again!

    Log in to Reply
    • John Moffat says

      January 24, 2023 at 4:13 pm

      The lectures are all up-to-date for the current syllabus (which will not change until after the June 2023 exams).

      Log in to Reply
  3. kamran.khan says

    July 30, 2022 at 7:37 pm

    Dear John,

    Would it be right to say about Planning and Operational variance that Planning variance compares the standard budget with flexed budget. And the operational variance compares the flexed budget with the actual performance.

    Log in to Reply
    • John Moffat says

      July 31, 2022 at 8:39 am

      No, it would not be right. The flexed budget is only the original budget adjusted for the actual level of activity. With planning and operational variances we revise for changes in the standard costs etc..

      Log in to Reply
  4. hermela says

    March 20, 2022 at 4:03 am

    hello sir I am really thankful because i get open tuition,
    the lecture is really digestible , however as usual I have a question,
    1,why planning and operational variance sum is compared to variance analysis and how it is related with accessing the mangers problem or operational problem?

    Log in to Reply
    • John Moffat says

      March 20, 2022 at 7:34 am

      One of the main reasons for doing variance analysis is to see how well (or badly) managers are doing their job. As an example, if the purchasing manager is paying more than was budgeted for materials then it looks bad. However, if the reason is that the supplier increased prices it is not fair to blame the purchasing manager. Operational variances compare what was actually paid with what they should realistically have paid (after taking account of the increase in prices) rather than what was originally budgeted.

      Log in to Reply
  5. jatingupta@2097 says

    July 24, 2021 at 9:48 am

    Hello Sir!
    I wanted to ask why are we comparing the actual cost with the revised cost in Operational Variance, as the actual cost is the one which has been occurred where as the revised cost is the one which has been found after the production has been taken place. Can you please tell me what is the reason for this comparison?

    Thanks in advance.
    Jatin

    Log in to Reply
    • John Moffat says

      July 24, 2021 at 3:21 pm

      The revised cost is the new standard cost and is revised because for whatever reason the original budgeted cost was not realistic. For example, it could be as simple as suppliers have increased their prices. We separate planning and operational variances in order to identify anything that has gone wrong in operations.

      Log in to Reply
  6. 7fsa says

    August 29, 2020 at 9:55 pm

    Dear John,

    How are you?
    I hope you are great.
    Thank you for your nice informative lecture lesson.

    Log in to Reply
    • John Moffat says

      August 30, 2020 at 8:09 am

      Thank you for your comment 🙂

      Log in to Reply
      • SirPEK says

        April 4, 2021 at 6:15 am

        Wow, interesting and easy to digest.
        Thank you.

      • John Moffat says

        April 4, 2021 at 9:02 am

        Thanks for the comment 🙂

  7. khussaini says

    November 24, 2018 at 1:03 pm

    Hi, with reference to example 1, in operational variance calculation for usage, why did not use the revise change in price per kg rather than the standard price per kg? Since we have been knowledge that the price has been changed.

    Log in to Reply
    • khussaini says

      November 24, 2018 at 1:31 pm

      Same issue in example 2.. please advise.

      Log in to Reply
      • John Moffat says

        June 10, 2019 at 11:42 am

        Some people prefer to do that. However the current examiner prefers it the way that I show it in my lectures – keeping the two things completely separate.

  8. hardikundu says

    November 11, 2018 at 5:37 am

    Can there be a question for preparing graphs for other topics?

    Log in to Reply
    • John Moffat says

      November 11, 2018 at 9:36 am

      No – you cannot be asked to actually draw any graphs in the exam, but you can be tested that you understand them.

      Log in to Reply
      • 007sk says

        June 10, 2019 at 9:51 am

        Any response to khussaini quest on the use of revised and standard price ?

      • John Moffat says

        June 10, 2019 at 11:41 am

        I will answer him now, but I do not always see comments posted here. That is why we have the Ask the Tutor Forum where questions are always answered within 24 hours!

  9. alie2018 says

    November 8, 2018 at 7:10 am

    Thanks for this brilliant lecture. For planning and operational variance we compare the original budget with the revised budget.

    Log in to Reply
    • alie2018 says

      November 8, 2018 at 7:13 am

      Planning = original budget Vs revised budget
      Operational = actual performance Vs revised budget

      Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy