Help with costing variances

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I was wondering if any students had any ideas on easy ways to remember the different variances used in the RCI unit.<BR><BR>I have to take this exam in December and I am having difficulty in remembering the different variances.<BR><BR>Any help greatfully received.<BR><BR>Thanks<BR><BR>Carol

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    My advice is to do a search for variance topics on the forum. That way you can look at lots of peoples ideas on how to remember them. I had the same problem but i'm working through it now because i did the search.<BR><BR>Try it and see!<BR><BR>Danni<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    Do you have a copy of the previous central assessments?<BR><BR>These help put the exam into perspective and help to recognise the types of questions we will be asked in December.<BR><BR>I too am having problems with variances!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    Try using the following matrix<BR><BR>1 AQ X AP =<BR><BR>2 AQ X SP =<BR><BR>3 SQ X SP =<BR><BR>1 - 2 = Mat Price Variance<BR><BR>2 - 3 = Mat Usage Variance<BR><BR>1 - 3 = Mat Totals Variance<BR><BR>Use the same matrix for Labour variances substituting Qty & Price for Hours & Rate.<BR><BR>Hope this helps!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    I remember them using a similar matrix to the message above <BR><BR>Q P <BR><BR>A X A = 1<BR> 1 minus 2 = Material Price Variance<BR>A X S = 2<BR> 2 minus 3 = Material Usage Variance<BR>S X S = 3<BR> 1 minus 3 = Material Totals Variance<BR><BR>Key<BR>Q = Quantity<BR>P = Price<BR>A = Actual <BR>S= Standard <BR><BR>Use the same method for Labour variances substituting Q & P for H & R (Hours & Rate) which gives you Rate, Efficiency and Total.<BR><BR>I also use a matrix that has been passed onto me for the Fixed Overhead Variances but its difficult to illustrate on this message, so here goes<BR><BR>S<BR> E<BR>A V<BR> C<BR>B<BR><BR>There should be little arrows from the E to the S and A etc.......<BR>(E = S minus A) (C = A minus B) (V = S minus B)<BR><BR>I remember this as "SEA Covers Beach Violently"<BR><BR>S = Standard<BR>A = Actual<BR>B = Budget<BR>E = Efficiency<BR>C = Capacity<BR>V = Volume<BR><BR>Good Luck I have found these really useful, Let me know how you go!<BR><BR>Jo <BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    Hi <BR><BR>Thanks very much for your help with the varraiances. I found them very useful. Hopefully when it comes to the exam in a fortnight I should be ready to tackle them.<BR><BR>Thanks again <BR><BR><BR>Carol
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    If you send me your email address I will send you an excel spreadsheet which I drew up from 6 past exam papers. All you need to do is clear the answers and re-enter them over and over again until the formulas stick. The answers won't be correct if your report doesn't balance.<BR><BR>Good luck.<BR><BR>Sharon<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help with costing variances

    Hello there!<BR><BR>My e-mail address is "rinass@rediffmail.com".If you could e-mail me the excel spredsheet.<BR><BR>Thanks<BR>Reena

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