Hi Sir,
I am really struggling with advanced variance analysis. It is not so much a lack of understanding as I feel follow it well when I watch the lectures and recall the answers on questions, but more so I am struggling to remember the pro formas of planning and operational variances etc when I actually have to complete the questions.
Please do you have any tips on remembering this? This will be my 3rd time sitting PM with previous fails of 46% and 48%, and this has always been a rough area for me. It's very frustrating given both attempts have been so close to a pass. Basic variance analysis was one of my strongest topics when I sat MA so I am not sure why I am struggling so much with this.
Any advice would be appreciated.
Thanks.
Ask the Tutor ACCA PM
Variance analysis
3y ago#1You can try to use this method:
The standard cost for the cotton which is used to make pillowcases is $5 per m2. Standard usage is 0.5 m2 per pillowcase.
Pillowcases - Budget 190,000 - Actual 180,000
The actual cost of the cotton in November was $5·80 per m2.
95,000 m2 was used to make the pillowcases.
The world commodity prices for cotton increased by 20% in the month of November
At the beginning of the month, the hotel chain made an unexpected request for an immediate design change to the pillowcases. The new design required 10% more cotton than previously
So…………
AQ 95000 & AP 5.8
RSQ 99000 (90000 * 1.1) & RSP 6 (5 * 1.2)
SQ 90000 ( 180,000 * 0.5m2) & SP 5
AQ AP
DIFF GIVES OP PRICE VAR
AQ RSP
DIFF GIVES OP USAGE VAR
RSQ RSP
DIFF GIVES PLAN PRICE VAR
RSQ SP
DIFF GIVES PLAN USAGE VAR
SQ SP
AQ AP = 551,000
=95000*5.8
AQ RSP
=95000*6 = 570,000
RSQ RSP
=99000*6 = 594,000
RSQ SP
=99000*5 = 495,000
SQ SP
=90000*5 = 450,000
Sign into reply to this topic.