Variance Question

Feedforward is simply nothing to do with setting standards. D is rubbish. There is no 'right' statement for that.

Tutor can you tell what performance standard are? Are they used to check peformance of labor?

They are targets for performance eg, how many errors are made or average time to complete a task.

Hi, I'm confused about how to differentiate between questions that ask for total variance and those that ask for price variance. To find price variance, we compare actual costs against the flexed budget. For example, if a question states: "What is the total sales revenue variance comparing actual revenue against the flexed budget?" the final answer provided is total variance. I find this confusing because "comparing actual against flexed" seems to refer only to price variance and does not take into account activity variance. Can someone clarify this for me?

I agree with you. 'Flexing' is always performed by relation to volume: volume produced for cost variances or volume sold for sales revenue variances. So if budgeted sales is 1000 units at a budgeted sp of $10 per unit, budgeted revenue is $10,000. If actual sales are 1100 units at $11 per unit, actual revenue is $12,100 and the total revenue variance is $2,100 F. The sales price variances is 1100 x (11 - 10) = 1,100F The sales volume revenue variance is (1100 - 1000) x 10 = 1,000F Note 1000 + 1100 = 2100, the total revenue variance. To me the phrase "What is the total sales revenue variance comparing actual revenue against the flexed budget" must mean the price variance. In the example, above the actual revenue is 12,100 and the flexed budget revenue is 1,100 x 10 = 11,000 so the difference is the price variance 1,100 F

Alright, thank you for clarifying it.