MAC Effiency Variances

A-Vic

Slowly learning variances but am always getting stumped with these any tips or advice on these would be really helpful.

Vic

taskey

if they are the same as the pec and pvr ones, i wrote them all down on an a4 piece of paper and stuck it near my monitor.

once i had grasped what they were for, it clicked. you have to understand why you are using them and what the answer tells you, if that makes sense.

tracy

A-Vic

Thanks Tracy

Yeah Mac the same i think.

taskey

http://forums.aat.org.uk/showthread.php?t=22143&highlight=pev+variances

excellent post by sandy

A-Vic

Thats fab thanks tracy copy pasted and printed on the wall at work

taskey

no worries

http://forums.aat.org.uk/showthread.php?t=19695&highlight=pev+variances

also another good post

Victoria

I don't know if this will help you but the way we were taught to remember it is as follows:

Remember Saab:

S - standard hours
A - actual hours
A - actual hours
B - budgeted hours

Volume: S-B x OAR

Efficiency: S-A x OAR

Capacity: B-A x OAR


i found it easier as there wasn't all the words involved in remembering the formulas!

A-Vic

Victoria wrote: »

I don't know if this will help you but the way we were taught to remember it is as follows:

Remember Saab:

S - standard hours
A - actual hours
A - actual hours
B - budgeted hours

Volume: S-B x OAR

Efficiency: S-A x OAR

Capacity: B-A x OAR


i found it easier as there wasn't all the words involved in remembering the formulas!

Thats brill deffo will help thank you

shawn michaels

I remembered variances using this diagram:

<

---

V

---

>
SHAO - AH - BH x OAR
<--E--><--C-->

(I just remembered the word SHAOAHBH)

SHAO = standard hours for actual output
AH = Actual hours
BH = Budgeted hours
OAR = O/Head absorption rate

E = Efficiency variance
C = Capacity variance
V = Volume variance

from the diagram:

Volume variance = (SHAO - BH) x OAR
Efficiency variance = (SHAO - AH) x OAR
Capacity variance = (AH - BH) x OAR

Only variance not listed is Overhead expenditure variance which is a simple formula:

Overhead Expenditure variance = Budgeted overheads - Actual Overheads

Theres also PAUS (Price based on Actual, Usage on Standard):

So:

Material price variance = (SP - AP) x AQ
Material Usage variance = (SQ - AQ) x SP

where SP = Standard price, AP = Actual price, SQ = Standard Quantity, AQ = Actual quantity.

Hope this helps

jilt

MAC is hopefully my last exam to sit, I haven't really started yet, I'm getting a headache just reading this thread!

A-Vic

the books pretty good jill

A-Vic

lord just reading i understand what jill means tho there seems a lot to remember