MAC Effiency Variances
AVic
Registered Posts: 6,970 Beyond epic contributor ๐งโโ๏ธ
Slowly learning variances but am always getting stumped with these any tips or advice on these would be really helpful.
Vic
Vic
0
Comments

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.
tracy0 
Thanks Tracy
Yeah Mac the same i think.0 
0

Thats fab thanks tracy copy pasted and printed on the wall at work0

no worries
http://forums.aat.org.uk/showthread.php?t=19695&highlight=pev+variances
also another good post0 
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: SB x OAR
Efficiency: SA x OAR
Capacity: BA x OAR
i found it easier as there wasn't all the words involved in remembering the formulas!0 
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: SB x OAR
Efficiency: SA x OAR
Capacity: BA x OAR
i found it easier as there wasn't all the words involved in remembering the formulas!
Thats brill deffo will help thank you0 
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 helps0 
MAC is hopefully my last exam to sit, I haven't really started yet, I'm getting a headache just reading this thread!0

the books pretty good jill0

lord just reading i understand what jill means tho there seems a lot to remember0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 266 NEW! Qualifications 2022
 147 General Qualifications 2022 discussion
 9 AAT Level 2 Certificate in Accounting
 42 AAT Level 3 Diploma in Accounting
 65 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 274 VAT
 92 Software
 274 Tax
 138 Bookkeeping
 7.3K General accounting discussion
 193 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 590 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership