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Sir,
Is there anyway you could answer part B only of March/June 2021_Medical Temp Co Question?
It totally threw me off guard, like if there isnt already so much material to cover which is unfair in my oppinion but they have to make up more variances I guess to lower even more the already low passing rates.
I passed FR and FM without much problems at all but this PM is just mind blowing.
Thank you
The question says that when the budgeted for quarter 2 they assumed that they would maintain the share of the market that it had in quarter 1.
In quarter 1 the market was for 14,000 nurses and their share was 30%, so they will have budgeted on 30% x 14,000 = 4,200 in quarter 2.
It turned out that in quarter 2 the actual size of the market was 18,900 nurses and so they should really have expected 30% x 18,900 = 5,670.
The difference of 1,470 is due to the change in the market size and therefore the market size variance is 1,470 x the standard contribution of 80% = $1,176 favourable, and is a planning variance.
So they should have expected to supply 5,670 nurses, but they actually supplied 5,300. So the difference of 370 is due to a change in their market share and therefore the market share variance is 370 x the standard contribution of 80% = $296 adverse, and is an operational variance.
The examiner has not ‘made up’ more variances. Although market share and market size variances are rarely asked you should have at least one question on them in your Revision Kit.
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