[Rabina]

okay. Thank you sir

[Rabina]

They have done it differently so I want to know if it is correct too.As you have said different method provides different answer.

[Rabina]

Thank you sir

[Rabina]

Here’s the answer

(b) The planning variances are calculated by comparing the original budget and the revised standards after adjustment for factors
outside the control of the organisation.
On this basis the revised standards would be a price of $4·80 per kg with revised usage at 42g per card.
Planning price variance = ($4·80 – $4)4,200 = $3,360 Adverse
Planning Usage variance = (4,200 – 4,000)$4 = $800 Adverse
The total planning error (variance) is $4,160 Adverse
The operational variances compare the actual spend with the revised budget figures.
Operational price variance = ($5·25 – $4·80)3,500kg = $1,575 Adverse
Operational usage variance = (3,500 – 4,200)$4·80 = $3,360 Favourable
The total operational variance is $1,785 Favourable

I didn’t understand about 42g of the revised usage

[Rabina]

please help me calculate planning variance if this question according to your preference.

[Rabina]

Thank you

[Rabina]

Thank you

[Rabina]

Okay
Thank you

[Rabina]

Thank you

[Rabina]

I feel the same.However,is there any chance of option A?

[Author]

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