PEV reconciliation statement

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi Everyone

Hope the revision is going well and stress is not getting the better of you (unlike me).

Can anyone help clarify a couple of points on the reconciliation statement of std absorption cost with actual absorption cost:-

1. When you do the statement do you put the adverse in one column and the favourable in another and then total at the end, or do you just put it in one long line and hopefully it will tally at the end.
2. When it asks you for the statement, do you always start with the std absorption cost or do you have to follow the question (as in June 2000) when it asks for actual to std.

Help would be greatly appreciated.
Eva 8)

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV reconciliation statement


    In fact it is totally up to u 2 decide how u treat them.

    u can put them in 2 separate columns and total them both, then decide which is more (F) or (A)

    or u can put them in one column with the adverse variances into brackets, and total them up.

    even starting with the total cost is up to u if it is not already set.

    the main idea is just to show what caused the difference between them (i mean the standard cost of actual production and the actual cost of actual production)

    i hope this could help

    goof luck

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV reconciliation statement

    Remember to leave out the Volume Variance though! :)

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV reconciliation statement

    Many thanks, that is really helpful
    Eva :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV reconciliation statement

    Eva

    I like the adverse/favourable columns approach and that is the only one I use when revising this topic.

    The other point is important. It doesn't matter. You can start with the standard cost of actual production every time. (I do) I have discussed this with Cliff Floyd and he agreed that the purpose is to recondcille the two totals and to see what had caused the difference.

    Just like a bank rec, if you swop the start and end points it doesn't matter it gives you the same information that you need.

    So (again) I always start from the standard cost and work through to the actual cost.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV reconciliation statement

    Many thanks to everybody for helping - it has made it a lot clearer in mind.
    Eva

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