pev again

System

on pev dec 2005 task 1.2 (ii) could someone explain to me how the 0.50 is arrived at and why in the model answer the price variance is 0.45-0.50 x 130000 when the price variance is std price-actual price x actual useage??

Thanks in advance,
Nik

System

Re:pev again

0.50 is the standard cost for paper - they've just inverted standard and actual costs in the formula they used from the more familiar way in the textbooks . I.e. actual usage*(actual price - standard price) instead of actual usage*(standard price - actual price)

I've noticed this flipping the formulae around is something that happens consistently on the PEV model answers. For instance, if you look at the ink price variance (1.1.b.i) you'll see the same thing. In the end doesn't really matter which way round it's worked it as long as it's consistent and the adverse or favourable bit is right. It is, though, bloody confusing and I've no idea why they do it this way.

System

Re:pev again

I suspect that both the examiner who wrote that paper and the current examiner are not fans of formulae.

So when they produce an answer they are trying to find a difference in the values and can see from the nature of what has happened whether it is favourable or adverse.

My advice, by all means compare your finished answers to their ones, but don't try to learn the techniques by following the workings they've done.

System

Re:pev again

I spent ages looking for where the .50 came from and only after an hour of frustration did I realise that was the price already given in the previous task! Doh!

So that was my lesson learned for the day, where they say ADDITIONAL INFORMATION the task is likely to refer back to data already used. :oops:

System

Re:pev again

thanks for that guys i spent ages getting worked up about it as well.I think they just like confusing us!!

System

Re:pev again

And PEV is bad enough as it is!