15 Close Window Moving to another question v-save this i esponse. Question 15 of

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15 Close Window Moving to another question v-save this i esponse. Question 15 of 50 Question 15 1 points Save Answer Standahl At 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 $39,590 per month plus $2,649 The company expecled is acivity n August to be 82 tighnts and 294 passengers, but the actuai actvity was es mights and 297 passenpers The actual cost for planie aoerating costs n Auust was $255,090 per flight pius $4 per passenger The spending variance for plane operating costs in August would be closest to $2.2940 510.253 U $2.294 F 10.253F Moving to another question wensave the reso re Question 15 of 50 Close Windiow 850 PM 2/11/2017 1 Type here to search

Explanation / Answer

Estimated Operating Costs:

Estimated Number of flights = 82

Estimated Number of passengers = 294

Cost formula for operating Costs

= $39590 + $2649 per flight + $4 per passenger

= $39590 + ($2649 * 82) + ($4 * 294)

= $39590 + $217218 + $1176

= $257984

Actual Operating Costs = $255690

Since Actual Operating Costs are less than the budgeted or expected Operating Costs, there exists a favorable variance.

Spending Variance = Budgeted Operating Costs - Actual Operating Costs

= $257984 - $255690

= $2294

Correct Option is $2294 F

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