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8 June, 05:56

Dermody Snow Removal's cost formula for its vehicle operating cost is $3,040 per month plus $334 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $8,660. The spending variance for vehicle operating cost in December would be closest to:

A. 276 U

B. 276 F

C. 392 F

D. 392 U

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  1. 8 June, 09:26
    0
    spending variance = 392 favorable

    Explanation:

    Giving the following information:

    Dermody Snow Removal's cost formula for its vehicle operating cost is $3,040 per month plus $334 per snow-day. For December, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $8,660.

    spending variance = (standard rate - actual rate)

    spending variance = [ (3,040 + 334*18) - 8660] = 392 favorable
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