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while calculating “material usage operational variance “; should i use Original standard price or should i use Revised price?
There are two ways of calculating planning and operational variances. Either method gets full marks, even though they give different answers.
The previous examiner preferred one way whereas the current examiner prefers the other way.
Our free lectures and free lecture notes do it the way that the current examiner prefers (and so do the current editions of study texts and revision kits). If you are using older books then they will do it the other way.
Again, the examiners says that either method will get full marks (but the way she prefers is actually easier 🙂 )
jetjail: Please don’t answer in the Ask the Tutor Forum – you are not the tutor
(and your answer makes no sense at all – you do not use two different prices to calculate the usage variance!!)tammo: what I wrote before remains the case. The current examiner uses the original standard cost to calculate both the planning usage variance and the operational usage variance.
(The previous examiner used the original for the planning variance, and the revised for the operational variance)
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