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22 July, 09:40

Southington Snow Removal's cost formula for its vehicle operating cost is $1,900 per month plus $430 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 21 snow-days. The actual vehicle operating cost for the month was $11,470. The vehicle operating cost in the planning budget for December would be closest to: A. $10,930 B. $11,470 C. $8,739 D. $8,780

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  1. 22 July, 13:39
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    D. $8,780

    Explanation:

    the budgeted expected 16 days of activity for the Snow removal's. The Budgeted will reflect cost for this level of activity.

    so we have a budgeted cost of:

    430 dollar per day x 16 days of activity = 6,880 variable cost

    + fixed cost in the magnitude of 1,900

    total budgeted for Snow removal 8,780

    The actual cost will be calclate with the actual days of activity.
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