PEV Mock Paper

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
Wonder if someone can help... Had my mock paper back yesterday and had an answer wrong for Task 1.1 (XIV). The question was to calculate Material A Price Variance.

I did this using Actual Quantity of 60,000 metres bought but they work it out in the suggested answers using 58,000 metres used. I thought you would use actual and adjust for c/s in the reconciliation.

HELP!!!!

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    Which paper is it?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    stnd cost-actual cost x actual qnty used, not purchased. its mat price of what has been used
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    That helps, Cheers!

    Would there ever be closing stock in your reconciliation between stadard and actual cost??
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    This sounds odd for an AAT mock

    Your original idea sounds correct to me. Does the question say that the materials go into stock at standard price per metre (the more common way)?

    If so you are right.

    In a material price variance you should watch out for differences between issues and purchases. But in any AAT PEV question you should treat the material price variance as the difference between the standard cost of what was purchased and the actual amount paid.

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    If you have a change in raw material stock this would appear separately on the reconcilliation.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    In the information given, it says there was no change in the stock.

    So, would you not worry about it and just calculate the variance on Actual Quantity of Material used??
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    Is the stock that didn't change
      raw material stock
    or
      finished goods stock
    or
      both

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    If there has been no change in the stock of raw materials, then the purchases would have to be the same as the issues.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    This is really confusing me!

    In the question, it says:

    Actual Q of Material A used 58,000 metres
    Actual Q of Material A bought 60,000 metres.

    As a note at the bottom it say There was no change in the stock of 'Sloppy Jo' jean held in May 2006.

    I am assuming c/s is 2000 metres (raw material).

    I have just looked in my textbook and it says that The Price Variance is calculated as the Total Amount Actually Purchased x std cost - act cost.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    Don't be confused

    Everything you have written makes sense

    The finished goods stock is unchanged but there has been an increase in the raw material stock of 2,000 metres
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    The price variance is exactly what your book says (and as I have said in my earlier posting)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    But they marked my answer wrong, when i worked the variance out on actual Q Used of 60,000.

    Why would they do that?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    Who are they?

    I think they have made a mistake.

    I would do the answer for you if you think that might help.

    The problem I have is that I don't have the question (although the name Sloppy Joe does ring a bell)

    sandy.hood@chichester.ac.uk
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    Woa

    I think you have just said why they marked you wrong
    60,000 was not the amount used
    it was the amount bought 58,000 was used
    Actual Q of Material A used 58,000 metres
    Actual Q of Material A bought 60,000 metres
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    Sandy

    I have just e-mailed you. Your help is much appreciated.

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV Mock Paper

    I replied with the spreadsheet

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