Stock Variance

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:09AM in AAT student discussion
Could someone please explain the formula for Stock Variance?<BR><BR>Does it work like a subdivision (i.e., like scrap or index /fx rates)?<BR><BR>How does it fit into the Material Price and Usage equation of<BR><BR>AQ x AP<BR><BR>AQ x SP<BR><BR>SQ x SP<BR><BR>I have no information about this topic at all.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Stock Variance

    Stock Variance?<BR><BR>Do not confuse this with your formulae.<BR><BR>Think about a business you know where stocks of raw materials are purchased and issued to production. If stock was received into the stores at standard cost, then there may be times when more was purchased than was issued and other times when more was issued than purchased.<BR><BR>I don't teach formulae<BR>but if instead of AQ you said the actual quantity of raw material purchsed and the actual quantity of raw material issued then whatever the difference is (at standard cost per kg etc) would be a figure you could use within a reconcilliation of standard cost of production and actual cost
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Stock Variance

    Thank you so much, Sandy.<BR><BR>I am forearmed now.

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