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30 April, 19:47

Dermody Snow Removal's cost formula for its vehicle operating cost is $2,930 per month plus $323 per snow-day. For the month of December, the company planned for activity of 17 snow-days, but the actual level of activity was 16 snow-days. The actual vehicle operating cost for the month was $8,700. The spending variance for vehicle operating cost in December would be closest to: rev: 11_08_2017_QC_CS-108685, 11_29_2017_QC_CS-110702 Multiple Choice $279 U $279 F $602 U

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  1. 30 April, 20:12
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    602 U

    Explanation:

    Dermody Snow Removal's

    Vehicle operating cost is $2,930 per month plus $323 per snow-day

    Actual level of activity was 16 snow-days

    Spending variance for vehicle operating cost = Flexible budget-actual

    Hence;

    = (323*16+2930) - 8,700

    = (5,168+2,930) - 8,700

    =8,098-8,700

    =602 U

    Therefore the spending variance for vehicle operating cost in December would be closest to 602 U
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