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Hi John,
I watched your video about Planning and Operational Variance Materials.
Can you please tell me
what chapter is it in your F5 Notes , because I couldn’t find it?Secondly I found only some answer to Example 2 on the page 133 in Notes F5, Such as Expense Variance, Usage variance, Labour , Rate of Pay Variance, Idle Time Variance, Efficiency Variance. Variable overheads – where I also don’t know to which chapter correspond in the Notes? Can you please tell me ?
Next question: John, you said in the video of the Planning and Operational Material Variance, that ” You must have a new kit, because now the new examinator has different calculation compare to the previous year?” How big is the difference the new version to the previous? I have the the Bpp Kit for June 2014. So, now I am really caught that my material is old. Do you recommend me to buy a new Kit 2016 June Exam?
Thank you very much for your answer!
With regards Jana.Planning and operational variances are in the chapter called “More Variance Analysis” (the lectures are listed in the same order as the chapters in the lecture notes).
Page 133 continues on page 134!! Also if you turn back to Page 132 it says which chapter it refers to!!
Although the examiner accepts either method of calculating Planning and Operational Variances, the way she prefers (and certainly the easiest way) is the method I explain in the lecture. Rather than buy a new Revision Kit, download the relevant questions from the ACCA website.
(However, I cannot remember whether or not the 2014 Kit contains lots of multiple choice questions or not. I don’t think it does, in which case you should buy a current edition because Section A of the exam is now 20 multiple choice questions and it is important to practice lots of them.)
Dear Jhon,
Good day,
I have worked exam question no 5 DEC 2013. I have try this question the way my tutor explained to us in class and my answers was different
For example as per acca answers sheetPlanning and operational variances is $343000 adverse but i got $339000 adverse ( 240000 for bedsheet and 99000 for pillowcase)
Material Usage Operational Variance (MUOV) i got 24000 favorable (48000 adverse for bedsheet and 24000 favorable for pillowcase)
But as per reconciliation i got same amount as mentioned in answers ie $339400 ADVERSE.
My real concern here is that when answering part b of the question, wont it be a problem while elaborating on diferrent varience here??
Please clarify Sir,
Thank you for your support in advance.
Regards
Avinash.Hi John,
thank you very much for your time!
In example 2: Calculate the rate of pay and efficiency variance, analysed into planning and operational variances.
——————————————————
I was watching the video about Labour Variance. I must say I don’t understand that in video of (02:23 time) you wrote:Rate of Pay: Actual hrs at actual cost 190 000 $769 500 ? You also didn’t mention the rate here?)
Actual hrs. at org. std cost
190,000*$4= $760 000
9,500(A).. Why $769 500 and not 779,000 ?
In your notes: there is : Rate of pay variance: no calculation ? Why
Planning variance:
Actual hours at revised cost: 190,000*$4.10=779,000! ( In my opinion this figure I mean was more correct than $769,500.) So, what do you think John?
Actual hours at standard cost: 190,000*$4.00=760,000.
Planning variance: 19,000(A).Then next question in ( 03.28 time) you said In Efficiency we have 190,000 hours
But in the notes on page 136 there is saying
Efficiency var.:
Planning Variance:
Revised hours 24,000 *7.5 hours= 180,000 hours.
Standard hours 24,000*8 hours= 192,000 hours.
12,000 hours *$4= $48,000(F).So, why did you say 190,000 hours, did you mean 180,00 hours? What is correct please.
Thank you very much for your time and explanation.
With regards Jana.Your original question referred to answer on page 133 of the lecture notes.
Those answers relate to Chapter 13 of the notes which are not dealing with planning and operational variances – they are in Chapter 14!Now you are asking about planning and operational variances !!
1. Why on earth do we need to mention the rate? The question says that the actual cost was 769,500 – the rate is therefore completely irrelevant. (And I am sorry, but I have no idea at all why you should want the actual hours at actual cost to be any different from 769,500)
2. Nowhere in the notes for this example do I write ‘rate of pay variance no calculation’
3. Actual hours at revised cost is indeed 779,000, but this not the same as actual hours at actual cost which is 769,500 as per the question.
4. I did not say 190,000 hours with regard to the planning efficiency variance at all.
190,000 hours are the actual hours worked and are relevant for the operational efficiency variance. For the planning efficiency variance it is the revised hours of 180,000.Sorry. I had answered your question, but for some reason my answer does not seem to have appeared.
However, when there is a part (b) that asks for comments about figures that you have calculated in part (a) (whether the topic is variances or something else) then when they mark part (b) they always give full marks if you are making sensible comments about the figures that you calculated (whether your figures are right or wrong (or even just guesses)).
So there is nothing to worry about – you never lose marks twice for the same mistake (even in this case it would not have been a mistake) 🙂
So you mean this question may have two answers if I got wat u mean right? That would be great sir
There are two ways of calculating planning and operational variances, and they give different answers.
The examiner has made it clear that either method is acceptable and will get full marks.The current examiner prefers the way that I do it in my free lectures (which is also the easiest way, and the way that all of the current text books and revision kits do it).
If you are using old books then they will probably do it the other way (which is the way the previous examiner preferred).
Thank you for clarifying this sir I’m afraid to switch method of doing those questions as it may be confusing.. I just hope that they consider this answers I am actually getting and that I don’t get penalized for. Thank you once again sir..
Have a great day ahead
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