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# Budgeting sample Assessments

Hi, were can I find the workings to the AAT sample assessments. I keep getting confused with the variance analysis on the papers. Task 6b on both papers. & also Task 4, I'm having a blank moment, I've worked out the year 1 prices sales price index. How do I work out year 5 forecast? Thx

• Hi Ellie,

I'm afraid they don't publish workings for the answers; however you can always ask here.

Standard direct labour cost of production = budgeted labour cost / budgeted production x actual production = 1,728,000 / 18,000 x 17,000 = 1,632,000

Labour rate variance = actual cost of actual hours for actual production - standard cost of actual hours for actual production
Actual cost of actual hours for actual production = 1,626,900 (from the question)
Standard cost per hour = 1,728,000 (budgeted cost) / 288,000 (budgeted hours) = 6
Actual hours for actual production = 280,500 (from the question)
Answer = 1,626,900 - 6 x 280,500 = 56,100 favourable (you know its favourable as the actual cost is more than the budgeted cost, ie. you've saved money)

Labour efficiency variance = standard cost of standard hours for actual production - standard cost of actual hours for actual production
Standard hours for actual production = 288,000 / 18,000 x 17,000 = 272,000
Actual hours for actual production = 280,500
Answer = 6 x 272,000 - 6 x 280,500 = 51,000 adverse (you can see it's adverse as it took more hours than budgeted, ie. it's cost you more money)

Labour cost variance = budgeted cost of actual production (which is the standard direct labour cost of production from the first line) - actual cost of actual production = 1,632,000 - 1,626,900 = 5,100 favourable (you know it's favourable as the actual cost is less than the budgeted cost, ie. you've saved money = good thing). This is made up of the rate and efficiency variances added together, so calculating it separately is a useful check that you have the other two right.

Task 6b on paper 2: material variances are exactly the same as labour variances (just different data) - so you should be able to figure it out from the above.