15. Thomasson Air uses two measures of activity, flights and passengers, in the

Question

15. Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,190 per month plus $2,048 per flight plus $1 per passenger. The company expected its activity in April to be 79 flights and 229 passengers, but the actual activity was 78 flights and 234 passengers. The actual cost for plane operating costs in April was $192,500. The activity variance for plane operating costs in April would be closest to: $2,043 F $5,711 U $5,711 F $2,043 U

Explanation / Answer

Operating cost for actual activity = $36190+($2048*79)+($1*229) = $198211

Activity variance = $198211-$192500 = $5711 F

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.