Question

Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $550 per month plus $77 per job plus $13 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in September to be 18 jobs and 148 meals, but the actual activity was 14 jobs and 145 meals. The actual cost for catering supplies in September was $3,340.

Required:

1. The catering supplies in the planning budget for September would be closest to ____________.

Answer 1

$3,860

Step-by-step explanation:

According to the scenario, computation of the given data are as follows:

Expected activity:

Jobs = 18

Meals = 148

Cost = $550 per month

Cost per job = $77

Cost per meal = $13

So, Catering supplies in planning budget can be calculated as:

Catering supplies in the planning budget = $550 + (18 × $77) + ($13 × 148)

= $3,860