PEV Dec 06

Tina Sparkles

Hi

Please can sum 1 look at section 1 task 1 b viii the model answer is 210 adverse but i'm sure it should be favourable, does any one agree??

Thanks xx

cs_1988

Hi Tina,

It is right i am afraid! I always get confused with the capacity as A or F as well, a good tip is the capacity + efficiency = Volume, so in this case it has too be 210 Adverse.

Hope that helps!

Chris

Tina Sparkles

Wow thank you that does help. with material and labour you can sort of reconcile them to the total variance cant you, is there anyway of checking with the overheads if they are all correct (the variances) .

cs_1988

If your cost reconciliation card doesn't agree you know there's a problem! So if that happens i would go back and go over the variances!

It is usually the Fixed Variances where the mistakes happen with me! Fixed Overhead expenditure is easy, so if you get Volume - Capacity + Efficiency they should be right!

If you cant find the problem don't panic! Your marked on everything you do so if you have just got one formula wrong it's not the end of the world.

Chris

Tina Sparkles

Do you do the 3 or 4 line approach? i think i have been taught differently to work the variances. i don't think you will know what im on about with the 3 and 4 line approach.

cs_1988

Hi Tina,

no not a clue lol :thumbup1:

For the Fixed Overhead i do

FO Expenditure V = Budget - Actual
FO Volume V = Standard for A Output - Budgeted
FO Efficiency V = Standard for A Output - Actual
FO Capacity V = Acutal - Budgeted

Volume = Efficiency + Capacity.

Just put the Volume in the reconciliation.

But as i dont know what you were asking not sure if that helps!!! :thumbdown:

heartsandstars

cs_1988 wrote: »

Hi Tina,

no not a clue lol :thumbup1:

For the Fixed Overhead i do

FO Expenditure V = Budget - Actual
FO Volume V = Standard for A Output - Budgeted
FO Efficiency V = Standard for A Output - Actual
FO Capacity V = Acutal - Budgeted

Volume = Efficiency + Capacity.

Just put the Volume in the reconciliation.

But as i dont know what you were asking not sure if that helps!!! :thumbdown:

My tutor has told me to put the efficiency and capacity variances in the reconciliation and not use the Volume - Would the examiner give the same marks whichever was included?

cs_1988

:001_smile:Just looked at past exam papers, there is examples of them doing both, so don't think it would matter either way!

heartsandstars

^^ Thanks for looking - I'm at work so only sneaking on when I can!