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Hi there,
I’ve come across a question that is phrased slightly differently than that of the F5 Lectures that involve the Standard Costing and Variance Analysis.
https://www.viewdocsonline.com/document/plohj4
Is this question asking for the variance of the Flexed Budget and Actual Budget as per the F5 Lecture of Chapter 13? Or is it asking for something else?
Kindest Regards,
MohammedIt is asking for an operating statement – reconciling the actual profit with
The standard (flexed) profit by means of the variances.Meaning the Statement of Profit/Loss? By using the figures gained from both the flexed profit and the actual? If so, how can this be done?
It wants an operating statement – starting with the flexed profit, then listing all the variances, and ending up with the actual profit.
If you watch my lecture on this website on variance analysis you will see what I mean 🙂
The only thing not needed is the volume variance because this is the difference between the original budget profit and the flexed profit.
Thank you very much! I just went through the first part of the lecture before posting this. I’ll be sure to watch the whole thing 🙂
Just to be sure, it is chapter 13 correct?
Thanks again!
I am not at home at the moment so I can’t check 🙁
It’s the chapter on variance analysis 🙂
Thank you so much, I was able to solve it and produce the operating statement! 🙂
Kindly show me how to answer the question of reconciling the budgeted profit and actual profit, using variances.
I cannot work through all of the variances here – it would take several pages!!!
If you watch my free lecture on basic variances then I work through a full example.
(Bear in mind that because this is revision of Paper F2, the F5 examiner has said that you will not be asked to prepare a full operating statement in Paper F5, but any of the variances can be examined as part of a question).
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