HELP Financial Performance

Jade95

My result for financial performance was NYC, so here we go again second time round on Wednesday. Now looking through practice papers and found some thinngs that i am not sure how the AAT worked out, any help would be appreciated. :001_smile:

CBT - 1

1.4

I can't seem to reach the answer for Direct materials bottles usage.

The AAT have - £60, i got - £260.

This is how i got my answer...

Usage variance = SP(SQ - AQ)

Sp = £2000/10000 = 0.2

SQ = 10000 AQ = 11300

So...

0.2 x (10000 - 11300)
0.2 x (-1300)
= -260

Any Ideas!

I also don't see where the figure for the budgeted standard cost for actual production.

The AAT got 30030, i'm not sure how they got to this answer.

Any ideas!

Thanks in advance.

Clintm15

Hi Jade,

It's calculated like this...

The standard quantity is 10,000 units / 10,000 bottles = 1 unit per bottle.

The standard quantity of actual production = 1 unit per bottle * 11,000 actual bottles = 11,000 units.

The standard price = £2,000 budgeted material cost / 10,000 standard units = £0.20

So the standard quantity of material for actual production at standard price = 11,000 * £0.20 = £2,200

The actual quantity of material at standard price = 11,300 * £0.20 = £2,260


So..

£2,200 - £2,260 = -£60 or £60 Adverse

I hope this clears things up for you

Jade95

Thank you Clintm 12

That has cleared it up, i did get £2260 at one point but wasnt sure.

Also do you know how they got the £30030 for the budgeted standard cost for actual production, because i normally work out the variances and work backwards.

Thanks again

Clintm15

No problem Jade.

Budgeted/Standard cost of actual production is calculated like this.....

Total budgeted cost = £27,300

Budgeted production = 10,000 bottles

Budgeted cost of production per bottle = £27,300 / 10,000 = £2.73

Actual production = 11,000 bottles

Budgeted cost of actual production = 11,000 * £2.73 = £30,030


That's the long version for clarity, it could have been calculated like this...

11,000 / 10,000 = 1.1
1.1 * £27,300 = £30,030

Jade95

Thanks once again, very clear now. :laugh:

I wish the AAT would show how they got their answers to the practice assessments, assesments would be much easier

Thank you

Jade:001_smile:

Days Days

u r great man