Sam22 Registered Posts: 117 ? ? ?
urgh, trying to get my head around the variances for financial performance!!
I think tomorrow's going to be a long day. So much to learn!!

Anyone else struggle with these?

Rant Over!


  • imtiaz
    imtiaz Registered Posts: 20 Dedicated contributor ? ? ?
    Yes yes yes! It's the only thing so far within AAT I can say has really been a hurdle/challenge to me.

    When I read about it, I feel like i've understood it, then when I attempt some questions either I blank out or I get the wrong answers. It's extremely frustrating thinking i've understood something and then to just go on and fail all the questions lol..

    My FNPF exam is in December and I plan to use the video lectures on opentuition (acca F5) to hopefully ground my knowledge in the topic. Hoping that will lead me to perform better in questions. If that doesn't work, i'm not sure what i'll do, maybe i'll just have to chance it on the exam. :lol: The kaplan textbook hasn't worked for me so far for variances in FNPF. :thumbdown:
  • Sam22
    Sam22 Registered Posts: 117 ? ? ?
    My exam is in 2 weeks!!!! Stressing a little. I use the Osborne books. They are very good and explain things clearly. I think I just need to spend a bit more time going over the text as it was a while ago I looked at that chapter and jumping straight uni practice questions probably wasn't a good idea!

    Good luck with your studies!! Also how do you get the acca video lectures??
  • imtiaz
    imtiaz Registered Posts: 20 Dedicated contributor ? ? ?
    Google opentution, when on the website, select ACCA, then select F5, scroll down and it will say 'Free ACCA F5 lectures' - Same thing for the other papers :) good luck!
  • Sam22
    Sam22 Registered Posts: 117 ? ? ?
    Oh brilliant. I'll have a look at that later!!
  • Sam22
    Sam22 Registered Posts: 117 ? ? ?
    Hi Nps,

    I actually came across this thread last night after I'd posted and yes it does help. I've made a note of it amongst my other revision notes.

    Thank you
  • sarah2266
    sarah2266 Registered Posts: 49 ? ? ?
    i made a load of flash cards and just kept going over them when ever i had a spare five minutes it helped and i passed
    first time...i now have my last exam which is financial statements and struggling with the motivation...i feel i need
    a kick up the a*** to get myself into gear...

  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    I've written a lot of posts on the topic of variances and seem to take a completely different approach to the conventional text books.
    I now have a book in print, and this is the only book (to my knowledge) which shows the tabular approach I have used for years.
    Many accountancy lecturers who perhaps trained and encountered variances in their training, then did jobs where they did not have to use their variance training and came back to it as they prpared their classes. Unlike that I spent years working with variances (at a time when computerised systems were in their infancy).

    I've had students in my classes who have hated the tabular approach, but far more who have mastered the technique by using the tables. This becomes a real time saver in the more time pressured exams such as F5 ACCA or P1 or P2 CIMA.

    Instead of learning a formula to answer an exam question, my recommendation is that you understand what you are trying to find out AND how you find the variance.

    Take this question from TopCat as an example
    A company uses 6000kg of material to produce 10,000 units. To budgeted production was 12,000 units and the standard output for this level was 6,600 kg at £2 per kg

    The material usage is?

    I get £1200

    6600-6000 =600


    apparently it is £1000 but how?

    We need to know the standard cost of the difference between the materials we should have used to produce 10,000 units and the actual material we used. At home you might have 20 people around for a cup of tea, and have a standard usage of 1 tea bag per person at 1.25 pence per tea bag.

    Take the tea bag example first. You used 18 tea bags for the 20 cups of tea.
    Your standard cost in terms of tea bags for 20 people is 20 people @ 1 tea bag per person x £0.0125 = £0.25
    Your standard cost of the tea bags used is 18 tea bags @ £0.0125 = £0.225
    A variance of 2.5p favourable

    Take TopCat's example
    12,000 units are expected to use 6,600 kgs (so 1 unit will use 0.55 kg)
    And the standard cost of the 10,000 units produced is 10,000 x 0.55kg @ £2.00/kg = £11,000
    The standard cost of the kgs used is 6,000 kg x £2.00 per kg £12,000
    A usage variance of £1,000 adverse

    Does that help? And can you see the descriptions I've used (rather than rote learned formulae)?
    [email protected]
  • Clarekaye
    Clarekaye Registered Posts: 307
    I really struggled! And to be honest and not rude in any way people on here tried to show me there own way of learning it and it only confused me more.

    Now my variances are spot on and its the rest like the written ones on GPM which get me.

    Not being funny but if your exam is in two weeks and your still stuck on something can you not move it, I feel like I have been learning this one foreever but my exam is in two weeks and I feel way more confident than I did even one week ago.
  • Sam22
    Sam22 Registered Posts: 117 ? ? ?
    All of the responses have actually really helped make things clearer. Thank you!
    I'm feeling much more confident with these now. I'm just going to keep practicing and going over my notes and I should be fine.

    Thanks everyone!
  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    Dear Clarekaye

    I noted that you wrote "its the rest like the written ones on GPM which get me"

    You may like to stick to the ways you've always looked at this, if so that is fine. But this link takes you to a chapter from my recent book which aims to deal with the Financial Performance L4 AAT exam task 10. (The GPM question)

    If you like it, all well and good. If you don't, I hope it doesn't set you back.


    [email protected]
Privacy Policy