[Whydoineedthis]

Is anyone else really struggling with variance analysis from B2 like I am? I still can’t seem to figure it out or when I do it takes me 6 minutes a question. Am I screwed because this is a big part of the exam?

[jeff]

From the NINJA Notes…picture 3 Cats…SAM, SAL, and OAT

STANDARD COSTING

Material Variances (SAM)

Standard Material Costs
–Actual Material Costs
= Material Variance

Labor Variances (SAL)

Standard Labor Costs
–Actual Labor Costs
= Labor Variance

Overheard Variances (OAT)

Overhead Applied
–Actual Overhead Cost
= Total Overhead Variance

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Whydoineedthis]

Thanks for the quick reply Jeff, I think my main issue is splitting these variances into the Price, Usage, Labor Rate and Efficiency variances when it comes to DL, DM or OH. Is there any easy way to master that part of it?

[livealittle]

I have to picture what they are asking…

material price variance – what did I pay for it, was it on sale, did I pay a premium

material usage variance – did I use too much per unit? if I did, why? was it that I got a great price on the material, but didn't realize it was substandard quality and had a lot of breakage, so my price was favorable, but my usage was unfavorable

etc…

BEC - 8/8/16
REG - 66, 77
AUD - 81
FAR - 9/8/16

[Mehow]

You're not screwed. You might not even get a variance problem, but keep working and trying to figure it out.

FAR = 86 4/22/16
BEC = 80 6/01/16
REG = 07/26/16
AUD = ?

[Whydoineedthis]

So I think I have the DL and DM variances down now but the overhead ones are still confusing, just gonna hope for the best I guess.

[Author]

Replies