Applied Management Account AQ 2022

Aimee_M

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

shamilkaria

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

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

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"