1. 

   Givemesleep
   

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   Can anyone in simple terms tell me what it is we are trying to solve with these problems and what a good first step is when seeing a variance question? To save time, yes I have wathed the Roger Youtube video, SEVen etc., I can memorize, but just haven't had that aha moment yet. Just need a little guidance, I will crack the rest myself with practice. Many thanks

   Reg 11/15/2011 - 80
   Aud 02/28/2012 - 81
   Bec 05/31/2012 - retake
   Far 08/31/2012
   
   
   Givemesleep

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   Posted 4 months ago #
2. 

   Yvonne570
   

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   Oh yes, this is something that can be simplified.

   Volume variance = if volume usage is higher than forecast, the difference would be unfavorable. Even if the overall cost is lower. Computed as difference between standard and actual units x (standard cost) = favorable/unfavorable volume variance.

   Cost variance: if per unit cost is higher than standard, then price variance is unfavorable regardless of volume. Computed as difference between standard and actual cost x (actual units) = favorable/unfavorable price (cost) variance

   Conceptually, a higher actual than standard when it comes to costs is unfavorable; however, if you use this concept for sales, then it's the opposite. I have a very useful link for you if you like.

   business.illinois.edu/doogar/302/Supp/Day11sol.ppt

   AUD - Passed:)
   FAR - Passed:)
   REG - Retake TBD
   BEC - Missed by 3 points Retake TBD

   Posted 4 months ago #
3. 

   Justinnnn
   

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   For Overhead Variances

   Spending Variance - The difference between actual overhead incurred (actual cost X actual input at actual achieved output) and standard cost X actual input

   Efficiency Variance- the difference between actual input (ie. direct labor hours) achieved X standard cost and standard input for "actual" (achieved) output X standard cost. (Fixed M OH is the total budgeted for the project, which is the same in both of these)

   "Flexible budget variance" (controllable) - the difference between actual overhead incurred and standard input for "actual" (achieved) output X standard cost. This is the sum of the above two variances, FYI.

   "Volume variance" (uncontrollable) - difference between 1. standard inputs at achieved output X standard cost, with fixed overhead budgeted as a total amount regardless of achieved output; and 2. overhead applied. Overhead applied is a standard rate or both variable and fixed overhead costs X budgeted inputs (for achieved output, this is beginning to sound redundant now:))

   REG 80 2/7/11
   FAR 91 10/8/11
   AUD 97 11/22/11
   BEC 96 2/4/12

   Posted 4 months ago #
4. 

   Givemesleep
   

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   Yvonne and Justin - wow thanks

   Reg 11/15/2011 - 80
   Aud 02/28/2012 - 81
   Bec 05/31/2012 - retake
   Far 08/31/2012
   
   
   Givemesleep

   Posted 4 months ago #
5. 

   Yvonne570
   

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   No problem. The attachment is a ppt file that will explain it so much more clearly than words can type. It's what helped me.

   AUD - Passed:)
   FAR - Passed:)
   REG - Retake TBD
   BEC - Missed by 3 points Retake TBD

   Posted 4 months ago #
6. 

   Justinnnn
   

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   http://worldacademyonline.com/article/26/378/fixed_overhead_variances.html

   This would be a good aid for overhead variances.

   Now the materials and labor variances are simpler than overhead so I won't bother since I am sure the review materials prepared you. (it really goes as far as difference in units X standard rate or difference in rates X actual units)

   REG 80 2/7/11
   FAR 91 10/8/11
   AUD 97 11/22/11
   BEC 96 2/4/12

   Posted 4 months ago #
7. 

   Givemesleep
   

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   Very nice my friends

   Reg 11/15/2011 - 80
   Aud 02/28/2012 - 81
   Bec 05/31/2012 - retake
   Far 08/31/2012
   
   
   Givemesleep

   Posted 4 months ago #
8. 

   Justinnnn
   

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   One more thing

   Actual Overhead Incurred is a "Debit" and Overhead Applied is a "Credit." A few MCQs make you compare them and answer "overapplied/underapplied" and "Debit/Credit"

   REG 80 2/7/11
   FAR 91 10/8/11
   AUD 97 11/22/11
   BEC 96 2/4/12

   Posted 4 months ago #

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