Planning and operational variances.new format plz??

TThasneem11y ago

in some q i found that operational efficency variance formula when both price and qty change as " (revised qty-actual qty) *revised price. but in the BPP mock 2,q4 had shown "(revised qty-actual qty ) *standard price can you plz suggest which is correct to be followed??

John MoffatTutor11y ago#1

There are two ways of calculating planning and operational variances. They give different answers but the examiner has said that she accepts either approach. BPP used to do it one way (the way that was in the Student Accountant Article) but this year have changed to doing it the other way (the way the examiner used last time she asked it)!! Best is to stick to whichever way you have learned. If you have not yet learned a way then in that case look at the exam question 'Truffle' and learn the way that answer does it.

TThasneem11y ago#2

thank you soomuch...and in that q.they used std price..and i will follow that..

John MoffatTutor11y ago#3

You are welcome :-)

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