vehicle operating cost is $2,990 per month plus $329 per snow-day. For the month of December, the company planned for activity of 23 snow-days, but the actual level of activity was 21 snow-days. The actual vehicle operating cost for the month was $10,860. The spending variance for vehicle operating cost in December would be closest to: Multiple Choice $303 U $303 F $961 U $961 F

Spending variance = $961 unfavorable

Explanation:

Giving the following information:

Standard:

Fixed = $2,990 per month

Variable = $329 per snow-day.

Actual:

Snowy-days = 21

Total cost = $10,860

To calculate the spending variance, we need to use the following formula:

Spending variance = actual costs - standard cost at the actual activity

Spending variance = 10,860 - (2,990 + 21*329)

Spending variance = $961 unfavorable