Question

Courington Detailing's cost formula for its materials and supplies is $1,920 per month plus $11 per vehicle. For the month of August, the company planned for activity of 87 vehicles, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,130. The materials and supplies in the planning budget for August would be closest to: Multiple Choice $2,877 $2,492 $4,468 $2,130

Answer 1

Answer:

$2,492

Explanation:

Cost = Fixed cost + (Variable cost per unit × q)

Fixed cost $=1,920

Variable cost per unit =$11

q= 52

Hence;

= $1,920 + $11 × 52

=$1,920+$572

=$2,492

Therefore the materials and supplies in the planning budget for August would be closest to:$2,492