question archive Towne Snow Removal's cost formula for its vehicle operating cost is $1,470 per month plus $399 per snow day
Subject:AccountingPrice:2.86 Bought8
Towne Snow Removal's cost formula for its vehicle operating cost is $1,470 per month plus $399 per snow day. For the month of November, the company planned for activity of 13 snow days, but the actual level of activity was 9 snow days. The actual vehicle operating cost for the month was $5,230. The vehicle operating cost in the flexible budget for November would be closest to A. $6,657. B. $5,061. C. $5,230. D. $4,609.
B. $5,061.
Step-by-step explanation
Vehicle operating cost: = [Fixed cost + (Variable cost per unit × Actual snow days)] = [$1,470 per month + ($399 per snow day × 9 snow days)] = = [$1,470 + $3,591)] = $5,061 Actual Results Flexible Budget Snow days (q) 9 9 Expenses: Vehicle operating cost ($1,470 + $399q) $5,230 $5,061