tour company uses two measures of activity, routes and passengers in its cost formulas used for budgeting and performance evaluation. The cost formula for tour operating costs is $56,860 per month plus $2,880 per route plus $14 per passenger. The company expected in August to perform 87 routes and serve 257 passengers, but the actual activity was 98 routes and 264 passengers. The actual tour operating costs in August was $305,100. The spending variance for tour operating costs in August would be closest to: Multiple Choice $37,696 Unfavorable . C $37,696 Favorable $5,918 Unfavorable $5,918 Favorable $31,778 Favorable . . C

tour company uses two measures of activity, routes and passengers in its cost formulas used for budgeting and performance evaluation. The cost formula for tour operating costs is $56,860 per month plus $2,880 per route plus $14 per passenger. The company expected in August to perform 87 routes and serve 257 passengers, but the actual activity was 98 routes and 264 passengers. The actual tour operating costs in August was $305,100. The spending variance for tour operating costs in August would be closest to: Multiple Choice $37,696 Unfavorable . C $37,696 Favorable $5,918 Unfavorable $5,918 Favorable $31,778 Favorable . . C

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 5CE: Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of...

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