- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
1)expenditure variance . Planning
Sir, following different methods are used in solution of both above mentioned examples. Kindly clarify
Ch. 14 Exa 1 –
Actual material used for actual production x (std cost – revised cost)
108900 kg x (5-4.85)So if I follow above method than revision kit example should be done in following manner
190000 kg x (4.10-4) = 19000
While in ot revision kit answer has solved in another way.
2)Also, operation variance – usage (revision kit)
The difference should be multiplied by standard cost $4 while in solution it is multiplied by revised cost $4.10
I have just realised what you mean by Revision Kit – you are asking about the Revision Notes.
What you say about this example is correct, and I am going to remove it completely.
There are two ways of calculating planning and operational variances, that give different answers. The examiner accepts either way (even though the answers are different).
The revision notes do it the way that the previous examiner preferred. However the current examiner prefers the way that is in our main lecture notes and lectures. I updated the lectures when the new examiner started, but I forgot about these revision notes – sorry 🙁
Ignore the example in the revision notes.
- You must be logged in to reply to this topic.