# FNPF struggle......

Registered Posts: 75 Epic contributor 🐘
This is the 1st time I've really struggled with learning formulas...

I just can't get my head around it.

To those that have been there and done this, or like me still studying it... Is there an easy way to remember them....?? :crying:
Fully AAT qualified July 2015

## Comments

• Registered Posts: 249 Beyond epic contributor 🧙‍♂️
Sadly there is no easy way!! I too really struggled with this unit, sure everyone has different way of remembering but this worked for me (passed with 5 exceeded, 1 met-written, 1 borderline-written & 1 didnt):-

Efficiency = Standard - Actual
Capacity = Actual - Budgeted
Volume = Standard - Budgeted

If for overheads then just x OAR

Efficiency = Standard - Actual
Capacity = Standard - Actual
Usuage = Standard - Actual

Cost or Rate (Actual x Std) - Actual

Planning v Control Variances
Total = Standard - Actual
Planning = Standard - Adjusted
Control = Adjusted - Actual

Had to keep repeating 'should have' versus 'did', or 'available' versus 'used'

I missed answering the price index question, so would definitely get that in mind (section got 1 did not meet).

I am sure that others on the forum will give you suggestions too - I know they did for me!!
• Registered Posts: 58 Epic contributor 🐘
Hey I really struggled with this exam I have just re sat it for the 3rd time =( Its the written sections that get me.

With the formulas if you just keep doing them over and over again you will remember them I have done them that many time now i know them off by heart the one i struggled with was capacity and efficiency variance and the way I remembered it was -

BAF CAP

Budgeted hours x Standard rate per hour of fixed overhead
2000 x 2 hours = 4000hrs x 1.50 = 6000
Actual hours x Standard Rate per hour of fixed overhead
3450 x 1.50 = 5175
Flexed hours x Standard Rate per hour of fixed overhead]
1800 x 2 = 3600 x 1.50 =5400

Capacity = Budgeted - Actual
6000 - 5175 = 825

Efficiency = Actual - Flexed
5175 - 5400 = 225
• Registered Posts: 422
I also struggled remembering the formulas but once you have a technique that works it's not difficult. I'm not
sure which formulas you struggle on - so I will try to explain them all
Key
Material Variances
SP = Standard Price
AP = Actual Price
SQ = Standard Quantity
AQ= Actual Quantity
Labour
AH = Actual Hours
SH = Standard Hours
SR = Standard Rate
AR = Actual Rate
Fixed Overhead Variances
OAR = Overhead Absorption Rate
AOUT= Actual Output
BOUT = Budgeted Output
BFO = Budgeted Fixed Overheads
AFO = Actual Fixed Overheads
AHT= Actual hours taken
SHT = Standard hours taken
SHAO = Standard hours for actual output

So this is my key chain for remembering the formulas

The formulas with my key chain are as follows:

Direct Material Price Variance = AQ(SP-AP)
Direct Material Usage Variance = SP(SQ-AQ)

Direct Labour Rate Variance = AH(SR-AR)
Direct Labour Efficiency Variance = SR (SH-AH)

Fixed Overhead Expenditure Variance = BFO - AFO
Fixed Overhead Volume Variance = OAR(AOUT-BOUT)
Fixed Overhead Efficiency Variance = OAR(SHAO-AHT)
Fixed Overhead Capacity Variance = OAR(AHT-SHT)

So now using these formulas, I'm going to do a couple of questions from an aat cbt exam
AAT

Level 2 - 2010
Level 3 - 2011
Level 4 - 2013

ACCA

F4 - 2015
F5 - 2015
• Registered Posts: 422
AAT cbt exam 1

Task 1.2 a)
Total Material Price Variance = AQ(SP-AP)

AQ= 10000
SP = 3
AP= 33000/10000=3.3
Type into the formula = 10000(3-3.3) = 3000 ad

Now next question 1.2 b)
Material Usage Variance= SP(SQ-AQ)
SP= 14000/4000=3.5
SQ= 4000
AQ= 5000
Type into the formula = 3.5(4000-5000)= 3500 ad

As I'm going through the cbt might as well do task 1.2d) as well lol
That's just 6000/12000*14*14000= 98000

Now task 1.3
The Fixed Overhead Volume Variance = OAR(AOUT-BOUT)
OAR= Budgeted Overheads/ Budgeted Output = 24
AOUT = 30000
BOUT= 25000
So now we type into the formula= 24(30000-25000) = 120000 Fav

Fixed Overhead Expenditure Variance= BFO-AFO a nice easy one
BFO= 600000
AFO = 650000
Just 600000-650000=50000 ad

Fixed Overhead Efficiency Variance = OAR(SHAT-AHT) a tricky one
To work out the OAR for efficiency= Budgeted Overheads/ Budgeted Labour hours
So OAR = 50000/50000=1
SHAT= 50000 which is budgeted hours/ budgeted output which is 5000 then *4000= 50000/5000*4000=40000
AHT= Is just 43000
So now whack into the formula 1(40000-43000)=3000 ad

Fixed Overhead Capacity Variance = OAR(AHT-SHT)
For the OAR for Capacity - you use the same figure as the OAR for efficiency
OAR= 1 from before
AHT= 43000
SHT = 50000
Now put into the formula = 1(43000-50000)= 7000 ad

I also really struggled with the formulas but once I remembered the keys - it really help me out a lot:)

Hope this helps to remember the formulas

If you're still unsure don't hesitate to ask
AAT

Level 2 - 2010
Level 3 - 2011
Level 4 - 2013

ACCA

F4 - 2015
F5 - 2015
• Registered Posts: 283 Dedicated contributor 🦉
Thanks Aaron! Thats exactly how I am learning them!! Got post it notes all around my pc screen, just to jog my memory!!
Level 2 - Passed 2011
Level 3 - Passed 2012
Level 4 - Passed 2014

Awaiting to start CIMA
• Registered Posts: 422
lol i know the formulas off by heart now!!!

Keep practising them and it will pay off eventually :thumbup1:
AAT

Level 2 - 2010
Level 3 - 2011
Level 4 - 2013

ACCA

F4 - 2015
F5 - 2015
• Registered Posts: 75 Epic contributor 🐘
Thank you everyone for your answers, Aaron I'm printed yours out and I'm reading it over and over again.... Thanks I really appreicate this :thumbup1:
Fully AAT qualified July 2015
• Registered Posts: 422
No worries Chimpette :thumbup1:

If you're still unsure on the formulas, let us know and we can go through some more cbt questions.
AAT

Level 2 - 2010
Level 3 - 2011
Level 4 - 2013

ACCA

F4 - 2015
F5 - 2015
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