Question

Wadhams Snow Removal's cost formula for its vehicle operating cost is $1,900 per month plus $430 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 21 snow-days. The actual vehicle operating cost for the month was $11,470.
Required:
1. The vehicle operating cost in the planning budget for December would be closest to _________.

Answer 1

Answer:

$8,780

Explanation:

According to the planning budget, the monthly operating cost for the vehicle is:

$C=1,900+430d$

Where 'd' is the number of snow-days.

If the company has planned for 16 snow days, then the operating cost in the planning budget would be:

$C=1,900+430*16\\C=\ 8,780$

The planning budget for December would be $8,780