PMMistake in Kaplan kit Question 181?

I do not have the Kaplan Kit (only the BPP Kit) but if it is a past exam question then say which exam, because I have all the past exam questions. (If it is a past exam question then it is very unlikely that there is a mistake in the Kaplan Kit because they simply reprint the examiners official answers :-) )

Thanks for the response John. It is in fact question 180(sorry) Business advisor planned to use 3 hours of labor on 700 client services in June. Labor is paid $40 per hour. In June they were actually 900 services provided. Total labor hours were 3240 and the actual labor rate was $42 per hour. The advisor since discovered that due to a change in legislation that meant extra client responsibilities, the budget should have provided for 3 1/2 hours of labor per service. In the answers it is written as variance in hours 2700-3150=550 adverse Which then is given a value of $22000 at the $40 rate!

I assume that the question was asking for the labour planning variance, in which case the answer is correct. The original standard hours for the actual production are 900 x 3 hours = 2,700 hours. The revised standard hours for the actual production are 900 x 3.5 hours = 3,150 hours The labour planning variance is indeed 550 hours. This is costed at the original standard cost per hour of $40 and is therefore 550 x $40 = $22,000 adverse. Have you watched my free lectures on planning and operational variances? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.

Hi John, Indeed it was referring to Labour planning variance. I understand how it is worked out, however I don't understand where the 550 has appeared from...2700-3150 =450. Thanks, Yusuf

Well spotted :-) I never thought to check that bit of it. Sorry :-( So you are correct - it does seem that there is a mistake in Kaplan's answer :-)

Why are we multiplying 3 hours x 900 services ? while the standards indicates that use 3 hours of labour on 700 clients? please guide me it will be a great help as my answer is 14000

Although the wording of the question is poor, the implication is that they use 3 hours on each of the 700 services. (Think about it - how on earth could they have advised 700 times in just 3 hours in total :-) ). So if they do 900 services they would expect to spend 900 x 3 hours.