Question on Variances
jewels.p
Registered Posts: 1,774 Beyond epic contributor ๐งโโ๏ธ
How would you work out figures for:
Standard usage of material for the actual level of production achieved
Standard hours produced in the period
Standard hours in the budget
I cant even figure out how to do those calculations never mind the variances the calculations are to be used for!!!
Standard usage of material for the actual level of production achieved
Standard hours produced in the period
Standard hours in the budget
I cant even figure out how to do those calculations never mind the variances the calculations are to be used for!!!
0
Comments

Hi Jewels
If you look at that excel sheet i sent all it is, is
Standar Marterials / Budget units x Actual Units = Standard usage of material for the actual level of production achieved
All this is doing is looking at how much you expected to use for actual units  then you will go on to how much material you actually used to get your variance0 
I only printed off the second page of the Excel never noticed the first page!
This is stressing me out it is so complicated. Think I might pack it in for the weekend. Been trying for the last few days but it aint sticking in my head.
Thanks anyway Vic0 
Feel for you jewels take a break and go back once your relaxed even if need be go back to ECR books referesh yourself on that and it might go in a bit  but its not you almost everyone ive spoke to really struggled with this unit i know i did0

or another way of looking at it is
you expected to sell 100 units using 100kgs material but you produced 90 units instead so the sum would be
Standar Marterials / Budget units x Actual Units = Standard usage of material for the actual level of production achieved
100kgs /100 Units x 90 Units = 90 KGS (Standard usage of material for the actual level of production achieved)0 
Hello
There are many ways to get your head around the variances . The basic one which i have used was to make a standard cost card for every variance question regardless if it is required in the question or not once u have made the standard cost card the rest of the question becomes easier . Try to understand what each and every variance means because examiner these days are more interested in asking how an adverse and favorable variance occurs rather then just giving you the calculation .0 
or another way of looking at it is
you expected to sell 100 units using 100kgs material but you produced 90 units instead so the sum would be
Standar Marterials / Budget units x Actual Units = Standard usage of material for the actual level of production achieved
100kgs /100 Units x 90 Units = 90 KGS (Standard usage of material for the actual level of production achieved)
The amount per unit is 10 litres. The budgeted amount of drums is 5,000. The actual amount is 4,800 so is the answer 48,000? That is the answer I got to begin with but that seems too easy a calculation so I am thinking I am completely wrong?0 
looks perfectly correct to me all you need to do with this is calculate the 10 ltrs by actual units0

hang in there!!! i am getting my books this week!0

i think the difficult thing is mostly they bombard you with lots of info and its knowing which to pick out
God no I didnt mean the whole variances thing is easy I mean the question I am doing cant be that easy!
Can you confirm something Vic to calculate a Material Usage Variance it is:
(Standard Quantity Usage  Actual Quantity Usage) x Standard Rate
It has it the other way round in other notes I have been given. They say
(ACTUAL Quantity Usage  STANDARD Quantity Usage) x Standard Rate?????0 
God no I didnt mean the whole variances thing is easy I mean the question I am doing cant be that easy!
Can you confirm something Vic to calculate a Material Usage Variance it is:
(Standard Quantity Usage  Actual Quantity Usage) x Standard Rate
It has it the other way round in other notes I have been given. They say
(ACTUAL Quantity Usage  STANDARD Quantity Usage) x Standard Rate?????
I dont calculate it that way (but yes i think your right)
But basically they are now asking you to do the full variance
so how much you expected to use compaired with what you actually used
10,000units should have used 10,000kgs
But did use say 9,000kgs = 1000kgs Fav (because you used less)
= x price per KGS (always show variance in ยฃ)
Sorry i know woffled a lot but only way i can explane it broken down0 
AAAAAAAAAAAGH! I hate these bloody things! Just spent the past couple of hours trying to get it but there seems to be so many ways to calculate it I have absolutely no idea what I am doing.........away home (giving up again) :sad:0

Sorry
You will get it  it took me months but you will i know it0
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