Decision & Control

gdhillon

Hi Everyone,

This will be my 4th attempt at the decision and control unit I'm struggling a lot with the Standard Costing element and variances...

Any advice would be appreciated. At the moment, I'm looking at BPP Practice Assessment 2: Task 1 and it's like a foreign language!!

Pian32

I'd start by looking back at your Budgeting material for the variances as they cover the material and labour ones. I haven't got the BPP books so can't really help with the question.

PeterC

See if this helps: go to New Encyclopaedia of Accounting and select "Standard Costing and Variances"

Jay36598

@gdhillon - Don't let the past affect you. Change your approach and attack again.

First thing, don't rush it. Seems like your barrier might be the foundational clarity on basic concepts. In that case, it's worth spending time in going back to basics.

Standard costing links to variance analysis and that's where a lot of students initially struggle to get their grips.

The video at the bottom of the page here is quite useful. But, for variance analysis, simply reading through the text or watching course videos doesn't cut it. You have to develop your own deep knowledge of things, e.g., why actual costs are deducted from standard costs, how each of them are calculated differently for direct labour or materials or for indirect overheads, and then what is really meant by efficiency rate of an overhead absorption, etc.

The manner in which assessments are structured, you have to really know the in and out workings of the variances.

Basically, you have to spend at least 4-5 days if you're studying on your own to come up with your own knowledge and understanding, write it all down, analyse, then re-write it summarily. This way you will develop your own logical "system" of working variances out. Once you put in the hard work to figure it all out, trust me, all of the fog goes away and you can see it all with clearity.