Question

Wember 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 $400 per month plus $82 per job plus $10 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 September to be 20 jobs and 144 meals, but the actual activity was 16 jobs and 141 meals. The actual cost for catering supplies in September was $3,100. The catering supplies in the planning budget for September would be closest to:

Answer 1

Answer:

Standard cost Supplies= $3,480

Explanation:

Giving the following information:

The cost formula for catering supplies is $400 per month plus $82 per job plus $10 per meal.

The company expected its activity in September to be 20 jobs and 144 meals.

To calculate the total budgeted cost, we need to multiply the standard cost for the planned production:

Standard cost Supplies= 400 + (82*20) + (10*144)

Standard cost Supplies= $3,480