Question

Dermody Snow Removal's cost formula for its vehicle operating cost is $2,930 per month plus $323 per snow-day. For the month of December, the company planned for activity of 17 snow-days, but the actual level of activity was 16 snow-days. The actual vehicle operating cost for the month was $8,700. The spending variance for vehicle operating cost in December would be closest to: rev: 11_08_2017_QC_CS-108685, 11_29_2017_QC_CS-110702 Multiple Choice $279 U $279 F $602 U

Answer 1

Answer:

602 U

Explanation:

Dermody Snow Removal's

Vehicle operating cost is $2,930 per month plus $323 per snow-day

Actual level of activity was 16 snow-days

Spending variance for vehicle operating cost = Flexible budget-actual

Hence;

= (323*16+2930)-8,700

=(5,168+2,930)-8,700

=8,098-8,700

=602 U

Therefore the spending variance for vehicle operating cost in December would be closest to 602 U