FNPF struggle......
Chimpette22
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:
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
0
Comments

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 metwritten, 1 borderlinewritten & 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!!0 
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 = 2250 
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(SPAP)
Direct Material Usage Variance = SP(SQAQ)
Direct Labour Rate Variance = AH(SRAR)
Direct Labour Efficiency Variance = SR (SHAH)
Fixed Overhead Expenditure Variance = BFO  AFO
Fixed Overhead Volume Variance = OAR(AOUTBOUT)
Fixed Overhead Efficiency Variance = OAR(SHAOAHT)
Fixed Overhead Capacity Variance = OAR(AHTSHT)
So now using these formulas, I'm going to do a couple of questions from an aat cbt examAAT
Level 2  2010
Level 3  2011
Level 4  2013
ACCA
F4  2015
F5  20150 
AAT cbt exam 1
Task 1.2 a)
Total Material Price Variance = AQ(SPAP)
AQ= 10000
SP = 3
AP= 33000/10000=3.3
Type into the formula = 10000(33.3) = 3000 ad
Now next question 1.2 b)
Material Usage Variance= SP(SQAQ)
SP= 14000/4000=3.5
SQ= 4000
AQ= 5000
Type into the formula = 3.5(40005000)= 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(AOUTBOUT)
OAR= Budgeted Overheads/ Budgeted Output = 24
AOUT = 30000
BOUT= 25000
So now we type into the formula= 24(3000025000) = 120000 Fav
Fixed Overhead Expenditure Variance= BFOAFO a nice easy one
BFO= 600000
AFO = 650000
Just 600000650000=50000 ad
Fixed Overhead Efficiency Variance = OAR(SHATAHT) 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(4000043000)=3000 ad
Fixed Overhead Capacity Variance = OAR(AHTSHT)
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(4300050000)= 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 askAAT
Level 2  2010
Level 3  2011
Level 4  2013
ACCA
F4  2015
F5  20150 
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 CIMA0 
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  20150 
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 20150

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  20150
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