Late to the party here…
I feel like a fly that got trapped in the sticky CFA web too ! LOL
If I “MacGyver” the explanation given in the solution (i.e. “total periodic pension cost is the change in net pension asset or liability excluding the effect of the employer’s periodic contribution to the plan”)
I think the value they want us to quantify is how much better (or in this case worse), the pension situation is BEFORE consideration of any current contributions put into the “pot”.
So given the numbers, the net unfunded status improved by 183 but this includes the current period contribution of 887. If say, the company failed to make the current period contribution, the company would be further unfunded by 704…sigh – like watching Swan Lake performed with Doc Martens versus pointes LOL.