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VARIANCE FAVOURABLE OR ADVERSE

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › VARIANCE FAVOURABLE OR ADVERSE

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by AvatarJohn Moffat.
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  • April 18, 2022 at 5:59 pm #653820
    Avatarbaraka42
    Participant
    • Topics: 9
    • Replies: 22
    • ☆

    Good evening Sir,

    I am currently on the lecture for variances however, what I am confused about is the fact that you stated that the variance should be an adverse instead of Favourable.

    So the Actual purchase at STD COST is 517275 and
    The ACUTAL PURCHASED AT STD COST 544500

    Shouldn’t that be a favourable variance instead of adverse

    April 19, 2022 at 8:33 am #653868
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    512,275 is the actual purchases at actual cost (not at standard cost as you have typed).

    Since the actual cost is lower than the standard cost the variance is favourable.

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