June 2004 PEV Past Paper Query

System

Hi all,

I wonder if someone can help me:

In the June 2004 PEV Past Paper Section 2 Task 2.1 a iv:
It asks you to calculate the stock turnover in months for budgeted and actual:
The formula from my book is Cost of sales/Average stock.
Therefore i have used 2,329,600/220,000/12 = .88 months.

The answer is 1.2 and they have not supplied any workings - i really do not understand how they come to this.

If anyone can work this out i would be grateful for a reply.

Many thanks

Stacey

System

Re:June 2004 PEV Past Paper Query

Hi Stacey

I think you've used the Cost of production and not the Cost of sales and you have them the wrong way round, try this:-

220,000/2,289,600*12

Regards

Dean

System

Re:June 2004 PEV Past Paper Query

Hi dean,

Thankyou so much, it does make sense.

I have looked it up in my (osbourne book) and the formula i was using was their 'correct' formula, which was the wrong way round.

Could you be a star and give me the following variances:
Material Price Variance
Material Usage Variance
Labour Rate Variance
Labour Efficiency Variance
Fixed Overhead Expenditure Variance
Fixed Overhead Volume Variance
Fixed Overhead Capacity Variance
Fixed Overhead Efficiency Variance

The reason i ask is that i keep finding that i am using the formulas from the book and the past papers have the formulas a different way round. I just want to be confident that i am actually revising the right thing.

Thank you so much - you are making things so much clearer!!

Stacey

System

Re:June 2004 PEV Past Paper Query

Hi Stacey

Here are the answers taken directly from the website

http://www.aat.org.uk/servlet/file/PEV June 04 answers.pdf?ITEM_ENT_ID=3196&COLLSPEC_ENT_ID=34

To find these and other past papers click on:-

Students
Assessments
Past Papers

There you should find the last 3/4 years papers and answers.

Regards

Dean

System

Re:June 2004 PEV Past Paper Query

Hi Stacey

I hope that revision is going quite well for you.

In answer to your question:_
Material price variance is std price - actual price x actual amount purchased
Material usage variance is std usage for actual production - actual production x std price
Labour rate variance is std rate - actual rate x actual hours worked
Labour efficiency variance is std hours - actual hours x std labour rate
Fixed overhead expenditure is budgeted overheads - actual overheads

The following variances are dependant on what they are based on - usually labour hours, but could be machine hours
Fixed overheads volume variance is Std hours - budgeted hours x std absorption rate
Fixed overheads capacity variance is- Actual hours - budgeted hours x asbs rate
Fixed overheads efficiency variance is- Std hours - actual hours x abs rate.

As a post script I found a useful way to learn the sequences and then with practise understand the way that they are calculated:- PURE ASAS

P -(price) std price - actual price x Actual purchases
U - (usage) std usage - actual usage x Std price of materials
R - (labour rate) std rate - actual rate x Actual hours worked
Effiency - (labour efficiency) std hours - Actual hours x Std rate

The hwlp for the fixed overheads is :-

Volume variance - SBV- Silly boring variances
Capacity variances - ABC- the alphabet
Efficiency variance - SAE - Stamped addressed envelope
Hope this helps
Good luck
Eva

System

Re:June 2004 PEV Past Paper Query

Really silly question considering the above.

But can someone give me the following Formulas:
Average Age of Stock
Stock Turnover

Thanks so much

Stacey