Spending and efficiency variances

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    Topic
  • #183805
    Anonymous
    Inactive

    For those who has Wiley textbook, on page 390 on the chart on the top, is this the correct interpretation?

    Spending variance

    (actual rate – standard rate)*actual quantity

    Efficiency variance

    (Actual quantity – standard quantity)*Standard rate

    Budget spending variance

    (actual overhead rate – Budgeted Overhead Rate)*actual production

    Production volume variance

    (Actual Production – Budgeted Production(*Budgeted Overhead Rate

Viewing 10 replies - 1 through 10 (of 10 total)
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    Replies
  • #521776
    Anonymous
    Inactive

    I like the PURE DADS mnemonic:

    P = D x A

    U = D x S

    R = D x A

    E = D x S

    Price = Difference x Actual

    Usage = Difference x Standard

    Rate= Difference x Actual

    Efficiency = Difference x Standard

    #521823
    Anonymous
    Inactive

    I like the PURE DADS mnemonic:

    P = D x A

    U = D x S

    R = D x A

    E = D x S

    Price = Difference x Actual

    Usage = Difference x Standard

    Rate= Difference x Actual

    Efficiency = Difference x Standard

    #521778
    F15hy
    Member

    That mnemonic saved me on every variance question on my BEC exam.

    CA Candidate

    B-79 (4th Attempt, finally killed you Nov 2013)
    A-81 (3rd Attempt, Feb 2014) AND I AM DONE!!!!!
    R-80 (1st Attempt, Feb 2013)
    F-77 (2nd attempt, Jan 2014)

    Becker, Becker Final Review, NINJA 10-Point Combo
    ($M.O.B$)

    CA Ethics-92%

    #521825
    F15hy
    Member

    That mnemonic saved me on every variance question on my BEC exam.

    CA Candidate

    B-79 (4th Attempt, finally killed you Nov 2013)
    A-81 (3rd Attempt, Feb 2014) AND I AM DONE!!!!!
    R-80 (1st Attempt, Feb 2013)
    F-77 (2nd attempt, Jan 2014)

    Becker, Becker Final Review, NINJA 10-Point Combo
    ($M.O.B$)

    CA Ethics-92%

    #521780
    Soundwave
    Member

    One day before the exam, and I finally understand the PURE DADS mnemonic …

    #521827
    Soundwave
    Member

    One day before the exam, and I finally understand the PURE DADS mnemonic …

    #521782
    Anonymous
    Inactive

    Aww…soundwave…you should've asked and someone would've helped you. Good luck with your exam. I hope you get 5 easy MCQs on this and PURE DADS gives you the answers!

    #521829
    Anonymous
    Inactive

    Aww…soundwave…you should've asked and someone would've helped you. Good luck with your exam. I hope you get 5 easy MCQs on this and PURE DADS gives you the answers!

    #521784
    kahtwoloo
    Participant

    I just memorized a table:

    AQxAP


    AQxSP


    SQxSP

    materials/labor materials/labor

    price variance usage variance

    Basically all three of the situations (materials, labor, voh) are based off that table.

    I just think of it as ‘flowing' from the actual to standard.

    Make extra sure to memorize the middle formula exactly.

    Then all it really comes down to is:

    actual/actual = price variance

    standard/standard = usage variance

    middle formula

    The fixed overhead is the basically the same. I think its:

    actual foh


    budgeted foh


    (i forgot and i dont have the book next to me sorry)

    But whatever works for you, this subject was pretty intuitive for me. That DADS thing is easier for you.

    BEC-51,71,70,77
    AUD-50,62,68 (retake july)
    REG-55
    FAR-15(didnt study)

    #521831
    kahtwoloo
    Participant

    I just memorized a table:

    AQxAP


    AQxSP


    SQxSP

    materials/labor materials/labor

    price variance usage variance

    Basically all three of the situations (materials, labor, voh) are based off that table.

    I just think of it as ‘flowing' from the actual to standard.

    Make extra sure to memorize the middle formula exactly.

    Then all it really comes down to is:

    actual/actual = price variance

    standard/standard = usage variance

    middle formula

    The fixed overhead is the basically the same. I think its:

    actual foh


    budgeted foh


    (i forgot and i dont have the book next to me sorry)

    But whatever works for you, this subject was pretty intuitive for me. That DADS thing is easier for you.

    BEC-51,71,70,77
    AUD-50,62,68 (retake july)
    REG-55
    FAR-15(didnt study)

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