Question

Wadhams 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.

Required:
1. The vehicle operating cost in the planning budget for December would be closest to _________.

Answer 1

$8,780

Step-by-step explanation:

According to the planning budget, the monthly operating cost for the vehicle is:

`C=1,900+430d`

Where 'd' is the number of snow-days.

If the company has planned for 16 snow days, then the operating cost in the planning budget would be:

`C=1,900+430*16\\C=\$8,780`

The planning budget for December would be $8,780