Asked by
Vanshika Goyal
on Oct 10, 2024
Verified
Picozzi Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day.For the month of January, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days.The actual vehicle operating cost for the month was $7,720.The vehicle operating cost in the planning budget for January would be closest to:
A) $6,956
B) $6,862
C) $7,720
D) $7,568
Vehicle Operating Cost
Expenses associated with running a vehicle, including fuel, maintenance, repairs, and insurance.
Snow-Day
A day on which work or school is cancelled due to heavy snowfall or extreme winter weather conditions.
Planning Budget
A budget designed for a specific level of activity, used as a tool for planning and controlling costs.
- Implement adaptable budgeting methods to modify budgets in alignment with real activity measures.
- Examine the effects of modifications in activity levels on both projected and incurred expenses.
Verified Answer
PS
Learning Objectives
- Implement adaptable budgeting methods to modify budgets in alignment with real activity measures.
- Examine the effects of modifications in activity levels on both projected and incurred expenses.
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