Question

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 $530 per month plus $114 per job plus $16 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 25 jobs and 234 meals, but the actual activity was 20 jobs and 233 meals. The actual cost for catering supplies in October was $6,600. The catering supplies in the flexible budget for October would be closest to: A. $6,600 B. $5,699 C. $6,538 D. $7,124

Answer 1

Answer:C. $6,538

Step-by-step explanation:

Cost Formulae = $530 + ($114 X No of Jobs) + ($16 X No. Of meals)

Budgeted Activity for October = 20 jobs , 233 Meals

The Catering Supplies in the flexible Budget would be for October becomes :

= $530 + ($114 X 20) + ($16 X 233)

= $530 + $2280 + $3,728

= $6,538