Memos Explaining Variances
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Hi<BR><BR>Just about got the how to of variances sorted out ! Has anybody got any<BR>helpful tips on the writing of memos explaining the resulting variances.<BR> <BR>Apparently this is an area which caused problems in the December Intermediate Examination.<BR><BR>Thanks<BR>Roz<BR>(new member)
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Memos Explaining Variances
Hi Roz<BR><BR>Do you have the BBP book for intermediate Cost Information. There is a list of examples on Page 190 which I found helpful. Other than that all I can suggest is that you look at it logically ie if material usage is adverse then we've used more than we expected to, so could be due to poor quality, less skilled workers causing more wastage due to poor workmanship. this could be linked to the labour efficiency if this is adverse too as less skilled workers take longer to do job. Try and link variances if you can, as this shows that you understand them more.<BR><BR>good luck<BR><BR>Jasper0 -
Memos Explaining Variances
Hi Roz<BR><BR>I too get stuck on this very subject.<BR><BR>My tutor suggests looking at the question when it comes to writing the memos, there are often hints there (remember in the simulation it virtually told you what to write?!?!)<BR><BR>Also I would go with Jasper and look at your variances, if you have a favourable efficiency variance and an adverse rate variance you can usually say that you employed more skilled workers, or the workers decided to do overtime to get the job done (except write it as you would at work).<BR><BR>If all else fails, and this is my tutor's words not mine, write anything: oil spilliages, cloth cut wrong, faulty phone chips as it will be better than nothing!<BR><BR>Dont forget on the day, you will have no other worries in the world than to do this paper and you will be absorbed totally by it, so you will get the feel of it. I find now, that either the phone rings, i get interruptions, my son decides to colour on the pages I have completed etc etc - there will be none of that and all you have to do is write a memo, I am sure something will come to you on the day!<BR><BR>Best of luck<BR><BR>Mandy0 -
Memos Explaining Variances
the previous posts all point to something that examiners like, the interaction of variances.<BR><BR>favourable labour efficiency due to better quality materials, which, itself will have caused an adverse price variance and favourable usages variance. this works in reverse as well. it also carries over into fixed overhead efficiency and capacity variance.<BR><BR>as practice, consider oner factor changing, i.e. using more skilled and expensive workers in your labour mix than budgeted for and work through the effect this would have on all variances.<BR><BR>when you answer your exam questions please be clear, and concise. remember that less is more, use a blue pen and leave lots of white paper to soothe the markers eyes. (I`m being perfectly serious!)0 -
Memos Explaining Variances
Good tip Bryan<BR><BR>I'll remember that, altho I always seem to write in Black, will certainly be taking blue into exams!!<BR><BR>Less than 2 weeks to go now and nerves are starting to kick in. All I can say is, if we all revise then all we can do is our best. And of course keep posting for help, I must say I have learned lots since I started viewing the forums.<BR><BR>Thank you to everyone and good luck!!! roll on August!<BR><BR>Jasper0 -
Memos Explaining Variances
If you are talking about the Dec 2002 RCI exam, I did this as a mock yesterday and the area i found difficult was the report on reasons for fixed overhead variances. I believe it was also in the June 2002 RCI exam.<BR><BR>I agree with Jasper and the BPP Costing book does have an excellent break-down of reasons.<BR><BR>Hope you all do well in your exams, unfortunately not long now!!!!!!!!!!!0 -
Memos Explaining Variances
Roz <BR><BR>Ive produced a crib sheet thats got the fixed asset variances and an explanation of the reasons on it. <BR><BR>If you want a copy mail me at Rbrewsteruk@hotmail.com0