[Anonymous]

So, I use Yaeger videos, and Cyndi said to use “AQ usage” with DM Price Variance. Well, I encountered a DM Price Variance question on Wiley Test Bank, and they used “AQ purchases” instead. Isn’t “AQ purchases” supposed to be used with DM Purchase Price Variance?

Here is my attempt at embedding the screenshot:

<img src=”https://imgur.com/JVqxmaz”&gt;

If the HTML doesn’t work, here is the image link:

https://imgur.com/JVqxmaz

Thanks.

[Anonymous]

For what I like to think of the “normal” materials and labor variances, I use the mnemonic PURE AS AS SAD from Roger to remember how to solve these problems. By “normal” I mean materials variances for price and usage (the PU) and labor variances for rate and efficiency (the RE).

The AS AS part deals with whether the first variable you're multiplying by is an actual quantity/price/rate/etc. or a standard quantity/price/rate/etc. “A” is for actual and “S” is for standard when you line those up vertically with PURE. The SAD part is just a general reminder that the equation in parentheses for “normal” variances is always stander – actual = difference. So, vertically lining up the PURE AS AS mnemonic will give you:

P(rice variance for DM) – [A]Q(SP-AP)

U(sage variance for DM) – P(SQ-AQ)

R(ate variance for DL) – [A]H(SR-AR)

E(fficiency variance for DL) – R(SH-AH)

I blocked the AS AS so you can see how it vertically lines up with PURE. I always write PURE AS AS or draw the chart I discuss below for any variance problem and it's worked wonders for me so far. For PURE AS AS problems, a positive answer will give you a favorable variance and a negative answer will give you an unfavorable variable.

In contrast to that, for the “unnatural” variances [in my opinion, anyway] (meaning you're looking for price or usage variances for labor or rate or efficiency variances for materials), I memorized the chart in the Wiley Book that is AQxAP <– AQxSP <– SQXSP with spending/selling/budget variances being the difference between the first two equations and usage/efficiency/production volume variances being the difference between the second two equations. This tidbit isn't necessary for this particular problem, but I honestly had a lot more trouble remembering this so I thought I'd share anyway. 🙂 To determine favorable vs. unfavorable for these variances, subtract in the direction of the arrows and apply the positive/negative rule from the prior paragraph.

I hope that wasn't too convoluted or wordy for you to understand and I also hope I gave you all of the correct information. I did great on the variance problems in Cost Accounting in college but had to cram them in right before my BEC exam this time, so I needed tricks to help me remember everything.

Good luck with the rest of your studying!

[Anonymous]

For what I like to think of the “normal” materials and labor variances, I use the mnemonic PURE AS AS SAD from Roger to remember how to solve these problems. By “normal” I mean materials variances for price and usage (the PU) and labor variances for rate and efficiency (the RE).

The AS AS part deals with whether the first variable you're multiplying by is an actual quantity/price/rate/etc. or a standard quantity/price/rate/etc. “A” is for actual and “S” is for standard when you line those up vertically with PURE. The SAD part is just a general reminder that the equation in parentheses for “normal” variances is always stander – actual = difference. So, vertically lining up the PURE AS AS mnemonic will give you:

P(rice variance for DM) – [A]Q(SP-AP)

U(sage variance for DM) – P(SQ-AQ)

R(ate variance for DL) – [A]H(SR-AR)

E(fficiency variance for DL) – R(SH-AH)

I blocked the AS AS so you can see how it vertically lines up with PURE. I always write PURE AS AS or draw the chart I discuss below for any variance problem and it's worked wonders for me so far. For PURE AS AS problems, a positive answer will give you a favorable variance and a negative answer will give you an unfavorable variable.

In contrast to that, for the “unnatural” variances [in my opinion, anyway] (meaning you're looking for price or usage variances for labor or rate or efficiency variances for materials), I memorized the chart in the Wiley Book that is AQxAP <– AQxSP <– SQXSP with spending/selling/budget variances being the difference between the first two equations and usage/efficiency/production volume variances being the difference between the second two equations. This tidbit isn't necessary for this particular problem, but I honestly had a lot more trouble remembering this so I thought I'd share anyway. 🙂 To determine favorable vs. unfavorable for these variances, subtract in the direction of the arrows and apply the positive/negative rule from the prior paragraph.

I hope that wasn't too convoluted or wordy for you to understand and I also hope I gave you all of the correct information. I did great on the variance problems in Cost Accounting in college but had to cram them in right before my BEC exam this time, so I needed tricks to help me remember everything.

Good luck with the rest of your studying!

[Author]

Replies