PEV FIXED O/HS

System · November 2006

Can someone pls help me!!!!!!!!!!

I am stuck and have been since I started on the fixed o/h variances.

Has anyone got a useful method to remember these?

Thanks

Hannah

System · November 2006

Re:PEV FIXED O/HS

Unfortunately, I haven't got a quick way of remembering the variances. I did find it easier to write out both the calculation and the 'logic' version next to each other:

Fixed overhead volume variance =
absorbtion rate Ã— ( standard hours for actual production - standard hours for budgeted production )

fixed overheads absorbed by standard hours achieved minus fixed overheads absorbed by budgeted standard hours (or budgeted fixed overheads)

System · November 2006

Re:PEV FIXED O/HS

SH = standard hours for actual output
SH SH = standard hours for standard output
DID = acttual hours for actual output

EXpenditure: did we spend to much? Difference between actual and budget

EFficency: SH - DID

CApacity: DID - SH SH

VOlume: SH SH - SH

TOtal: Absorbed by Qty produced, less budget

I write them out in this order to help with the reconciliation

EX
EF
CA
VO
TO

It worked for me, but I think you have to find your own way - otherwise you might spend time learning someone's elses logic and not the variances.

Helen

System · November 2006

Re:PEV FIXED O/HS

Thanks Guy's,

I will have a look at a question and put your info to the test!

Han

System · November 2006

Re:PEV FIXED O/HS

One excellent tip I received earlier on in the year:

During the reading time, write down on the back of a page all the variances:

Overheads, Labour & Materials.

Do this before you do anything else and then, when you get to a question you have the definition of the variance clearly set out. Otherwise you might get confused by the question.

I do it everytime I begin a question - list all of them, even if they're not needed.

When I have to answer an overhead question, I calculate all the variances and reconcile them before answering it.

Until I begun doing that, I was moving on with errors which I would now spot.

Interestingly, once I had come up with my shortcut method, I began recalling the correct explanation for each variance in full, rather than the abreviation.

Strange but true...

Helen

System · November 2006

Re:PEV FIXED O/HS

Thanks Helen,

I think I will eventually pick up on how to do it.

I am just a bit all over the place at the minute with my revision as I am studying for my FRA resit from June

Looking at it now, I should have passed with flying colours, but ill health kept me away from college and I was also planning my wedding (think that caused the ill health) :roll:

Back on track now though and hamering the books, willing myself to get through these Dec exams.

Are you doing Technician level now then?

Where do you study?

Han

System · November 2006

Re:PEV FIXED O/HS

Yes, I'm doing Technican. I've passed Audit and will be taking PEV next week (gulp!).

I should have been doing PCR, but health, work and time (lack off) meant something had to go.

I'm studying with Premier (distance) and it's going well.

I would like to think I could do the other exams next June, but I will see how it goes.

Good luck next week!

Helen

System · November 2006

Re:PEV FIXED O/HS

Hi

Another possible way of learning the variances is:-

"PURE AS" (or "Pure as as" as it reads) method for materials and labour: -

same each time

Price (material) standard - actual x Actual
Useage (material) standard - actual x Standard
Rate (labour) standard - actual x Actual
Efficiency (labour) standard - actual x Standard

and for Overhead variances : -

ABC (the alphabet) Actual - Budget x absorb rate = Capacity
SAE (Stamped addressed envelope) Standard - Actual x absorp rate = Efficiency
SBV (Silly bloody variances) Standard - Budget x absorb rate = Volume

I found the silly rhymes invaluable for things like these make them easier to remember.

Best of luck
Eva

System · November 2006

Re:PEV FIXED O/HS

Well, I have PEV next Monday, FRA on Wednesday and PTC on Friday triple GULP!!!!

I am petrified of exams, work have given me a week study leave and the week of the exams off, so thats good.

Good luck to you aswell!!!!!!!

Hannah

System · November 2006

Re:PEV FIXED O/HS

Hows the tax going? I will also be sitting that next week

System · November 2006

Re:PEV FIXED O/HS

Hi Eva,

I am great with the first four material rate/useage etc, it's just the overheads.

Starting to make a little more sense this afternoon though.

Thanks for your advice!!!!

Han

System · November 2006

Re:PEV FIXED O/HS

Hi Paul,

Tax is going ok, the second section throws me, shares, land, chattles all that lot. I am sure plenty of past papers will see me through. There is just so much to remember, too many rules to apply in one question.

How are you finding it?

Han

System · November 2006

Re:PEV FIXED O/HS

Ok but ive had to revise laods. I keep making silly errors, like miss counting the years for taper relief. Chattels are ok, and shares are nearly there, sure I will be fine after another week though. Like you say, loads of practise this week and next!!

System · November 2006

Re:PEV FIXED O/HS

I know what you mean with the taper relief years, also when you have to work out the months when calculating the tax on your propery, throws me, must have a blockage in my brain when it comes to counting months!!!!

When does the bonus year on taper come into play, I know it's march, but what year?

It's my first day of study leave and I could cry already

System · November 2006

Re:PEV FIXED O/HS

You need to have held the asset at April 1998 (i think, please correct me someone if wrong)

System · November 2006

Re:PEV FIXED O/HS

I've got PEV on Monday and PCR on Thursday. Better than in the summer, which was:-

MON PEV
TUE DFS
WED BTC
THU PCR
FRI PTC

Or something like that. Still struggling with PEV, as it's the most boring thing I've ever had to study. Ever.

PCR isn't too bad, just this bloody PEV rubbish.

System · November 2006

Re:PEV FIXED O/HS

Hiya,

Give us your email address and i will send you some ways of remebering them, which i think arw helpful.

Thanks

Catherine

System · November 2006

Re:PEV FIXED O/HS

Bry10 wrote:

Or something like that. Still struggling with PEV, as it's the most boring thing I've ever had to study. Ever.

PCR isn't too bad, just this bloody PEV rubbish.

I had a dream about PEV last night. No, really. I've been reading a book about King Richard the Lionhearts military campaigns, and also revising for PEV; the two combined in calculating variances and performance indicators for the major battles and sieges.

System · November 2006

Re:PEV FIXED O/HS

How did the reconciliation statement go :?:

Helen

System · November 2006

Re:PEV FIXED O/HS

Honestly, I have no idea. I do recall the ROCE was down because of the new trebuchets (stone throwers) not having time to generate more sales. Now I think of it, I'm not sure how field artillery generates turnover. It made sense at the time.

The sad thing is that I enjoyed it. Do you think there's a market for accounting types in the Ministry of Defense?

Graham

System · November 2006

Re:PEV FIXED O/HS

Don't know. It just doesn't seem to add up.

Although on balance, I suppose it is an account full of suspense.

Helen

System · November 2006

Re:PEV FIXED O/HS

Hi Hannah if you send me your email I will send some stuff I have on fixed variances that somebody sent me

PEV FIXED O/HS

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