Variances -problem need help

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Please confirm when they asked to calculate the volume capacity efficiency variances. what exactly you look for to calculate, in other words, can it be used by the output or hours. I really dont know if i am putting the question across correctly.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Variances -problem help AND A TIP

    <b>The volume variance</b> measures differences in output with the budget.<BR><BR>If more is produced than budgeted this is a FAVOURABLE variance<BR>If less is produced than budgeted this is an ADVERSE variance<BR><BR>Two things can cause this difference:-<BR> 1 . the time allocated for production (CAPACITY)<BR> 2 . how quickly the output has been produced (EFFICIENCY)<BR><BR><b>The volume capacity variance</b> measures how much time had been budgeted against how much time was actually used.<BR><BR>If more time has been used than budgeted, the variance is FAVOURABLE<BR>If less time has been used than budgeted, the variance is ADVERSE<BR><BR><b>The volume efficiency variance</b> measures how much time was needed for the actual production compared to the standard hours for actual production<BR><BR>If more time has been used than standard, the variance is ADVERSE<BR>If less time has been used than standard, the variance is FAVOURABLE<BR><BR>Here's a tip<BR><BR>If you have a question such as this, you are probably not the first person to want to know the answer.<BR>Underneath your name there is a <b>search</b> button. If you click through and put your topic in the search phrase, select all, and then search you may find an earlier reply and save yourself a wait.<BR><BR><BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Variances -problem help AND A TIP

    Thanks much Sandyhood, you are always there. any question will get back to you

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