Applied Management Account AQ 2022

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How on earth does everyone remember the different calculations for Variances? Any top tips? PAUS I have but still doesn't help that much

Thanks

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  • shamilkaria
    shamilkaria Registered Posts: 67 Regular contributor ⭐
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    Hi @Aimee_M

    The only way unfortunately is by practicing. But below I have listed some which should hopefully simplify what you need to learn

    Materials Price Variance

    Actual Quantity Purchased x Actual Price Paid (Per Kg etc)

    Actual Quantity Purchased x Budget Price (What you were expecting to pay)

    Material Usage Variance

    Actual Quantity Used x Budget Price (What you were expecting to pay per kg etc)

    Standard Quantity for actual production (This is where you need to work out how many kg for example you were expecting to use for the actual units products) x Budget Price

    Labour Price Variance

    Actual Hours x Actual Price Paid (per hour for example)

    Actual Hours x Budget Price (What you were expecting to pay per hour)

    I do feel I have missed something, its just that I have done this exam a long time ago but If I have missed any off just let me know and I can look into it for you.

    Many thanks

    Shamil

  • shamilkaria
    shamilkaria Registered Posts: 67 Regular contributor ⭐
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    Hi @Aimee_M

    I hope you are well?

    I also created this document a while back, which I started on Materials. I cant seem to find the rest if I can find the rest I will send it over but I hope this helps you out too

    Kind regards

    Shamil
  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
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    Each variance is a version of "what did we pay v. what we expected to pay". You can see more about this in "Standard Cost Variances 1" here, but it might pay to first read "Standard costing and variances"
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