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In the Online specimen exam of CBE the question asks to calculate about the material price planning variance
The formula is
Material price planning variance= (Rev. std. price-Orig. std price)* actual purchaseBut her in the question the examiner has used the difference of orig. std cost and actual cost.
Plz guide me to this.One more thing is there I am concerned about and that is adding the row or column to the sheet. I know how to add while using normally excel but in the online exam I am unable to add the row or column to it.
Thanks
The examiner has not used the actual cost when calculating the material price planning variance.
The original standard cost was $60.
The market price was $85, but the actual price paid was $80.
Therefore the planning variance is 85 – 60 (85 is what they would have expected to have had to pay – effectively the revised standard), and the operational variance is 80 – 85.
Have you watched my free lectures on planning and operational variances? The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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