pev formula???

renae Registered Posts: 76 Regular contributor ⭐
Hi guys,

Ive read in prev threads the formula AQ x (SP-AP) for the price variances, what is the formula for the usage??
If I had half a brain cell left I could prob work it out........but not any more :blushing:


  • gingervicki
    gingervicki Registered Posts: 87 Regular contributor ⭐
    SP x SU - AU

    i think:confused1:

  • renae
    renae Registered Posts: 76 Regular contributor ⭐
    No :-(
    Looking at dec 08 paper, b, direct material (glass) usage variance.
    the answer is nil (worth it) but using that formula I get 6,000! eek
    Not sure if there even is one, or is it SU / bu x au?
  • lessci
    lessci Registered Posts: 180 Dedicated contributor 🦉
    I don't use formulas to remeber these but:
    Should have Used (at Standard Price) - Actually Used (at Standard Price),
    if thats any help
  • renae
    renae Registered Posts: 76 Regular contributor ⭐
    :001_smile: big help ta
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    as I said in another post...
    My book didn't teach any formula...was always shows this way instead:

    standard: £5 x 200kg= £1000
    actual: £6 x 200kg = £1200
    variance: £200 adverse

    since I started to use the formulas from the past paper and various comments here, I got confused, because using (SP-AP) x AQ I don't see quite clearly what's I'm calculating and most of the time I was taking the wrong amount!!
    So I now prefer to get back to my own original way, even it's a bit longer, at least it's clear what I'm doing
  • dobbieobby
    dobbieobby Registered Posts: 231 Dedicated contributor 🦉
    I'm weird, for price variance I remember PAM.
    Because the Price variance is Actual Materials (or litres, whatever) x the standand cost - what it did actually cost.
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