Fixed O'head Efficiency Variance????

Dimples

Hi All

Sitting the MAC exam tomorrow, 1st part of the paper im ok with but when it comes to variences i go to pieces, ive just about grasped the direct material price variance but for the life of me i just cant get the fixed overhead caoacity varience and the fixed overhead efficiency variance - for examle im doing December 06 paper section 2.1 b and even with the answers in front of me i just dont know how theyve come to their answer - purely cos i dont understand what im working out exactly? can someone please put it into simple and i mean very simple terms for me - im so stressed ive been sat here in tears for nearly an hour (

Thanks x

taskey

http://forums.aat.org.uk/showthread.php?t=27278&highlight=fixed+overhead+efficiency

try this link and i think it has a worked example too

Dimples

Thanks Taskey, but i already have this printed out and the bit on fixed overhead efficiency variance might as well be in french - i dont get it?!?!?! im seriously thinking about not bothering to go to the exam tomorrow!!

taskey

also read the PAMDILL thread,

hope that helps

Tracy

taskey

dont be disheartened, i was exactly the same.

i have trawled through posts from when i was doing variances and this really helped me.


Fixed overhead expenditure

Budgeted overheads - Actual overheads

Fixed overhead volume variance

Standard hours
less budgeted hours
=volume variance x OAR

I remember this by - Silly Bloody Variance

Hence the S in silly = Standard hours, B in Bloody = Budgeted hours and V in Variance = Volume

Fixed overhead Capacity variance

Actual hours
less Budgeted hours
=Capacity variance x OAR

I remember this by ABC A for Actual Hours B for Budgeted hours and C for capacity varience

Fixed Overhead Efficiency Variance

Standard hours
less actual hours
=Efficiency Variance x OAR

I remember this by Stamped Address Envelope

Hence S in stamped = Standard hours A in Address = Actual hours and E in Envelope = Efficiency Varience

as soon as i got in the exam room, i wrote down SAE and SBV then read the paper and once i go to this part i knew what to do, try it on some questions now and see if it sticks.

Tracy

Dimples

THank you so much for your help - im going to print it off now and read it 100 times before i go to bed - hopefully it will sink in (fingers crossed!) Roll on Thursday night when all my exams will be over - and if ive failed any i aint re sitting thats for sure!!!

Thanks again x