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Hi guys anyone else spotted the mistake in answers for question 181, should be 18000 not 22000? Most recent kit
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,
YusufWell 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.
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