@MargaretYK; I think the reason ‘b’ is incorrect is because of the phrasing. The words ‘too much’ give me a red flag, because we don’t know what ‘too much’ means. A is the better answer because we know rent is factored into the overhead rate, and that’s something that would directly affect an increased rate.
1 Like
Tricky! “Too much” tricky 
1 Like
You’ll probably hear this a lot, but try to understand the concepts. (direct and indirect labor, overhead rate, utilization rate and so on). The reason is that in the questions where you need to calculate how many hours Joe has left to work on the museum in schematic design phase, for instance, you want to know what the relevant numbers are and what numbers aren’t relevant. As people have often said that there is sometimes more information provided in the question than you need for answering the question. So do a “check” while you near the end of a calculation to see “does this make (conceptual) sense”. They aren’t intentionally confusing us, although it comes across that way. They are making sure that we know what these concepts mean, so our firm can stay financially afloat.
1 Like
Thanks for the advice @Hans-Christian - I think I have a grasp of the concepts, but I do get thrown really easily with the way things are worded. Good idea for the “check” on whether or not the calculation makes sense.