PEV - Operating statements

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Doing a test run on June 2006 at the moment. You're not asked to calculate the fixed overhead volume variance, but if you were would this figure go into the operating statement that reconciles the standard absorption cost of total actual production with the actual abosportion cost of total actual production?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    Are you doing 1.1 b?

    Capacity and Efficiency = Volume

    I work all the variances out:

    Expenditure
    Efficiency
    Capacity
    Volume
    Total

    This is the order I reconcile them in - which makes it easier. I work all of them out, even if not required, then I can agree them before answering.

    Helen
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    No, 1.1 (c)

    It's just the only statement I can see in the test papers I have don't ask you to calculate the F.O. volume. So I wasn't sure if you DID have to calculate the variance, would it go in the operating statement reconcilition?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    You would need either capacity and efficiency as separate figures, or volume on its own (but showing the workings of cap plus eff).

    I think it's more correct to show cap and eff.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    Thanks! On a different area, do you have an easy way to remember what y=mx+c is? I know y=forecast amount but get the rest muddled up!?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    Haven't a clue -

    Help!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    Poo, I don't either.

    Well I know that if you do:

    (Sales in last year-sales in first year)/(number of years-1) you'll get the same answer. So maybe we could use this to work backwards through the formula?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    You NEVER put volume variance in the operating statements as this is made up of all the others... just use efficiency capacity and expenditure....Good Luck!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV - Operating statements

    You NEVER put volume variance in the operating statements as this is made up of all the others... just use efficiency capacity and expenditure....Good Luck!

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