Question

Whit 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 $380 per month plus $94 per job plus $11 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 October to be 20 jobs and 216 meals, but the actual activity was 19 jobs and 221 meals. The actual cost for catering supplies in October was $4,790. The catering supplies in the flexible budget for October would be closest to:

Answer 1

$4,636

Step-by-step explanation:

The calculation of catering supplies in the flexible budget for October is shown below:-

Catering supplies in the flexible budget for October = Catering supplies + Per Job × October jobs + Per meal × October Meals

= $380 + $94 × 20 + $11 × 216

= $380 + $1,880 + $2,376

= $4,636

Therefore for computing the catering supplies in the flexible budget for October we simply applied the above formula.