Question

Chef Ann Marie of Dahlgren Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $380 per month plus $94 per job plus $11 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in October to be 20 jobs and 216 meals, but the actual activity was 19 jobs and 221 meals. The actual cost for catering supplies in October was $4,790. The catering supplies in the flexible budget for October would be closest to: A. $4,404 B. $4,790 C. $4,636 D. $4,597

Answer 1

Answer:

The correct option is C. $4,636

Explanation:

To compute the catering supplies amount, the following items need to be considered. along with this, the computation is also shown:

= Catering supplies + Job cost + meal cost

where,

Catering supplies are $380 per month

Job cost = Per job cost × expected number of jobs

               = $94 × 20 jobs

               = $1,880

Meal cost =  Per meal cost × expected number of meals

                 = $11 × 216 meals

                 = $2,376

Now put these values to the above formula

So, the answer would be equal to

= $380 + $1,880 + $2,376

= $4,636

The actual activity is not consider. Thus, it is ignored.

Hence, The catering supplies in the flexible budget for October would be closest to $4,636

Therefore, the correct option is C. $4,636