Time Series & Variance Analysis - HELP!

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hello,

I am studying for the PEV/PCR exams at the mo & just wondered if anyone could help with one or all of the following:

1) When averaging seasonal variations do you always have to calculate the residual amount and average over the seasons?
2) When 'flexing' the budget to find the standard cost of actual production do the fixed production overheads stay the same? In the (04/05) FTC book I've got one example that does (Chapter5) and one that doesn't (Chapter6)
3) Does anyone know if we are to analyse variances not only on labour rate & efficiency but also on idle time?

Please help!?!?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Time Series & Variance Analysis - HELP!

    In PEV the range statement for element 8.1 only mentions
    Time series (moving averages, linear regression, seasonal variations)

    In PCR the range statement for element 9.1 only mentions
    Projections:
    • Trends
    • Seasonal variations
    and the knowledge and understanding only goes as far as:
    time series (moving averages, linear regression and seasonal variations),

    I am treating 2) as a PEV question to do with operating statements for variance analysis.

    If you flex a budget you are finding out the costs and revenues that apply to the ACTUAL production.
    In a standard absorption costing environment this figure would be made up of all the standard costs multiplied by the number of units produced, so the fixed production overhead may be different from the original budgeted amount.

    Under marginal costing (more usually tested in PCR) you may have a flexed budget, in this case the fixed production cost would be the same as the original budget.

    The subdivision of variances is part of the range statement for PEV 8.1.
    Idle time variances have not been tested as labour variances in their own right since the PEV standards came in, but the examiner has said that he considers it appropriate to test them in a question that might say split the labour efficiency variance in to parts due to (a) machine break down and (b) the workforce working faster/slower than the standard time

    I hope that helps

    sandy.hood@chichester.ac.uk
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Time Series & Variance Analysis - HELP!

    Thanks for spending the time to reply! I've left all my revising to the 11th hour as usual.

Categories

Privacy Policy