Dec 2018 Section C - Variances

The ACCA now only publish a sample of questions from past exams and so without seeing the question I can't really help. The budgetary control statement is the same as the operating statement - listing the variances to explain why the actual profit is different from the budgeted profit. This is going back to Paper MA (was F2), and you can't be asked to prepare the statement for Paper PM, although you are expected to know what it is.

Hi sir, to add more points the question’s requirement was to prepapre Revised Budgetary Control Statement. There was the Actual results given with a fixed budget and variances were calculated between them. We were suppose to edit the fixed budget into a flexible budget, the catch was that the actual results were of 6 months. So the flexible budget was also needed to be prepared accordingly to the months and number of units.

Thank you tasbihak :-)

Hi, I am trying to work out the Variances question from Dec 18 Q32 - they are really difficult and in general variances make no sense to me! I would really appreciate if someone breaks down to me the answers because from the ACCA answers sheet is not clear how they have got the numbers. For example how do you calculate usage variance for all the 3 materials i.e. the Should Use numbers - 1840,2760 and 920? Same for the yield and mix? No clue how it works :(

I am surprised that you have no idea how it works, because surely you studied mix and yield variances before you looked at the question?? Almost every exam contains a question in section C on either mix and yield variances, or planning and operational variances - they really are standard topics. For the usage variance you compare the actual usage with the standard usage for the actual production, and cost out at the standard cost per kg (just as we did for Paper MA (was F2) in simple variance analysis). We can then analyse this into the mix and yield variances. The mix variance compares the actual total input with the total input at standard mix, and costs at the standard cost per kg. The yield variance compares the actual total input at standard mix, with the standard total input for the actual production, at standard mix, and again costs out at the standard cost per kg. All of this is explained in detail, with examples, in my free lectures. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.