[tmdebs]

hahahaha,
Thank you in fact now I understand,that what makes these two different is the Mix.
Thanks

[tmdebs]

Dear John,
what I know is that the difference between sales volume variance and sales quantity variance is that the former is calculated using the actual sales volume whereas the latter is calculated using the sales volume of products in the proportion of standard mix.

I wonder what would happen if I was dealing with only one product where the issue of mixes does not come into play. Don’t we get the difference between budget and actual in both cases AND value this difference by Standard profit or contribution?

[tmdebs]

Thank for the response,

Sorry for my delayed reply, However my question was basically the difference between sales qty and sales volume.

Thanks

[tmdebs]

Thank you very much.

Hope one day some one will come up with a method that makes every thing add up such that no one ever raises these queries again.

[tmdebs]

Thank you John for the detailed explanation. I think I should stick to the “more sensible way” and emphasise the fact that which ever way the Total variance must be the same

This is what I have picked from this discussion.
1. Variance analysis is about explaining the difference between the budgets profit and the actual profit. which difference is referred to as the TOTAL VARIANCE. It is usually split between the different elements i.e. material price, material usage, labour rate, labour efficiency etc. and these should Total up to the difference between the budgets profit and the actual profit.

2. In the same way The planning and operational variance analysis is trying to analyse this SAME difference between the budgets profit and the actual profit, into its components of Planning errors and operational inefficiency.

Please confirm whether what i have picked from this discussion is okay then i will close this chapter such that we engage in other areas.
Thank once again.

[tmdebs]

Thanks,
But I also wonder why the ” more sensible way” according to you does not add up to the basic variance when you add the operating and Planning.
I am a little disturbed because I though the essence is these planning and operational variance is to see what portion of the basic variance is due to planning and then which portion relates to operation inefficiency that is why I think they need to add up.

[tmdebs]

Thanks for the response.

So please help me understand, if I use the examiner’s (Less sensible way ) how can I first compute the total planning and total operation variance before I break them down into their individual price and usage variances.

I am very grateful for your help.

[tmdebs]

Thank you very much.
This is help full.

Now this is just a navigation issue.I find a challenge I find it hard to trace my question from the list that appears under ask the Tutor. I have been using the email alerts to get it.
What is the easiest way to use this site

[tmdebs]

Thanks again for the response.

So if i always need to use simultaneous equations to be able to find the values at the optimal point on the graph, how about the ISO contribution line. I thought this is what it helps with. You drag it outwards and the point when it last exists the feasible region is always the optimal point.

According to you response is it okay to ignore the Dragging of ISO line and i simply keep testing the points of intersection at the edges of the feasible region as i compare the contributions at each until i find the highest contribution, and then conclude that this is the optimal point?

[tmdebs]

Dear John,

Thanks for the response.
I get confused when you say “There is no such thing as the simultaneous equation method!”

I see in the syllabus under limiting factors item number 3,
c) Formulate and solve multiple scarce resource
problem both graphically and using
simultaneous equations as appropriate.[2]
Please clarify on that.

[tmdebs]

Hullo john,

Thanks for this issues it has confused me too a little bit.
How can i get to see you video?

Thank you?

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