Dec 03 PEV Question Task 1.1 (C)

princess Registered Posts: 80 💫 🐯 💫
I thought i had variances sussed (well as good as a very worried student could be) but i was doing the above question paper and in the operationing statement, they do not include the volume variance in the answers.

Could someone please tell me why this is??? I am so confused!!!!


  • Ampsie
    Ampsie Registered Posts: 145 🎆 🐘 🎆
    Hi Princess,

    The fixed overhead volume variance can be broken down into the fixed overhead capacity and efficiency variances.

    F.O volume variance is 3,600 adverse which is broken down into:

    F.O capacity variance 10,800 Fav
    F.O efficiency variance 14,400 Adverse

    Add those two together and it equals the F.O volume variance of 3,600 variance.

    So when you put those two in the reconciliation you don't put the volume variance in.

    Hope that helps!
  • princess
    princess Registered Posts: 80 💫 🐯 💫
    OMG such a blonde moment!!! Of course it does!!!!! Thank you so much Ampsie!!! :)
  • Ampsie
    Ampsie Registered Posts: 145 🎆 🐘 🎆
    LOL - don't worry - I'm having a lot of blonde momemts myself!
    I just hope it doesn't happen on Monday!

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