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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Revision Budget: question 12/2007
Dear Mr Moffat,
I have few questions about the revision budget 12/2007. Could you kindly help me?
Sale price:
The standard selling price of Widgets is $50 each and Splodgets $100 each. In the priod one there was a special promotion on Splodgets with 5% discount being offer.
The 5% discount is not being considered when calculating the revised budget, however it is correct to say that it should be considered when calculating the operational variance to calculate the actual price?
Labour hours
I don t fully understand why calculating the revised budget we need to consider 95% of the hours.
(2000*3*$5) +(500*2*$5)*0.95
Is it because by saying that security package were offered in exchange on increase of 5% of the efficiency, it means that when the budget was revised the labour hour was 95% of the one budgeted?
If we have to calculate the operational variance, will the actual hour be 3 and 2 whereas the revised hour 2.85 and 1.9?
Thanks in advance for your help
Best Regards
I am sorry, but I have the December 2007 real exam in front of me and the question you describe is not in that exam!
So I don’t know what question you are looking at. What might be causing your problem is that there are two ways of dealing with planning and operational variances. They give different answers, but the examiner gives full marks whichever of the two ways is used.
If you are using a current edition of a revision kit then it will use the way that the current examiner prefers, which is the way that I do it in our free lectures.
If you are using an old edition then it will do it the way the previous examiner preferred, which gives different answers.
However, the examiner will always accept either way.