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i was checking the answer of sales planing and operational variance in june 2015 paper the answer was,
(a) Sales price operational variance: (actual price – market price) x actual quantity
Commodity 3: ($40·40 – $39·10) x 25,600 = $33,280F
Sales price planning variance: (standard price – market price) x actual quantity
Commodity 3: ($41·60 – $39·10) x 25,600 = $(64,000)A.but what i got was,
planning variance of $(240,640)A
operational variance of $(209,920)FI don’t know how you arrived at your figures, but if you have been studying from a book that is more than 2 or 3 years old then it will be because of a change in method.
There are two ways of calculating planning and operational variances, that give different answers. The examiner accepts either way, and so either way gets full marks.
However, the easiest way (and the way the examiner prefers) is the way that her answer to the June 2015 question is done.
This is the way that all current text books now do it (and the way that I go through in our free lectures).
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