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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Confused over planning and operational variance
Hi,
From my study notes I have that:
Planning material price variances is (Standard price – Revised price) * Standard Usage, however in some of your questions it is (standard price – revised price) * Actual usage.
I’m just confused which one to use and if there is a rule for when I use either as I keeping using the wrong one.
Thank you
There are two ways of calculating planning and operational variances that are both logical but give different answers.
The old examiner preferred one way (which is the way it seems that your study notes show) but the current examiner prefers the other way (which is the way I show in my lectures, and is actually easier).
However the current examiner will accept either way for the full marks.
Again, the way that I show in my lectures is the way that the current examiner prefers.