Trusted by millions of Kenyans
LoginRegister
Study resources on Kenyaplex

Get ready-made curriculum aligned revision materials

Exam papers, notes, holiday assignments and topical questions – all aligned to the Kenyan curriculum.

Browse exam papers
Or go directly to:
Class notes Holiday assignments Topical questions Other resources

Describe the contemporary approaches to variance analysis

Describe the contemporary approaches to variance analysis

Answers

Faith
1. Traditional Approaches

Management focuses mainly on change in prices and inputs. Seeks to explain the change in profits i.e change in revenues and change in costs. We seek to explain changes in output prices and change in output quantities.
fig12102021120117.PNG

Types of Output Variances
Labour - Labour rate variance
- Labour efficiency variance

Materials- Material price variance
- Material usage variance

Overheads - Variable overhead rate variance
- Variable overhead efficiency variance
- Fixed overhead variance – volume variance
- Capacity variance
fig12102021120718.PNG
fig12102021121219.PNG
fig12102021121320.PNG
Titany answered the question on October 12, 2021 at 10:01

Answer Attachments

Next: Describe two approaches used to compute variances

Previous: Discuss the techniques of investment evaluation

View more Management Accounting Questions and Answers  |  Return to Questions Index

Exams With Marking Schemes

Related Questions