Asked by

Faith Myers
on Dec 17, 2024

verifed

Verified

Standahl Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $39,590 per month plus $2,649 per flight plus $4 per passenger. The company expected its activity in August to be 82 flights and 294 passengers, but the actual activity was 85 flights and 297 passengers. The actual cost for plane operating costs in August was $255,690.The activity variance for plane operating costs in August would be closest to:

A) $2,294 F
B) $7,959 U
C) $7,959 F
D) $2,294 U

Passengers

Individuals who travel in a vehicle but do not operate it, often used in the context of public or private transport services.

Activity Variance

The difference between the planned budget allocation for a particular activity and the actual expenditure incurred for that activity.

  • Investigate the effects of changes in activity levels on deviations in budgeting.
  • Understand the role of different activity measures in budgeting and variance analysis.
verifed

Verified Answer

MC
Mikele CokaniDec 18, 2024
Final Answer:
Get Full Answer