Question

Dallas 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 static or planning budget for January would be closest to: gs

Answer 1

The vehicle operating cost in the planning budget will be $6,956.

Step-by-step explanation:

The vehicle operating cost per month is $2,060.

While, the operating cost per month is $306.

The activity is planned for 16 snow days.

The vehicle operating cost in the planning budget

=The vehicle operating cost per month+(The vehicle operating cost per month*number of planned activity days)

=$2,060+($306*16)

=$2060+$4,896

=$6,956