JAR-458 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 $56,880 per month plus $2,876 per route plus $14 per passenger. The company expected in August to perform 88 routes and serve 257 passengers, but the actual activity was 97 routes and 269 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 $8,466 Favorable $26,052 Favorable $34,518 Unfavorable $8,466 Unfavorable $34,518 Favorable
JAR-458 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 $56,880 per month plus $2,876 per route plus $14 per passenger. The company expected in August to perform 88 routes and serve 257 passengers, but the actual activity was 97 routes and 269 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 $8,466 Favorable $26,052 Favorable $34,518 Unfavorable $8,466 Unfavorable $34,518 Favorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:JAR-458 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 $56,880 per month plus $2,876 per
route plus $14 per passenger. The company
expected in August to perform 88 routes and
serve 257 passengers, but the actual activity was
97 routes and 269 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
$8,466 Favorable
$26,052 Favorable
$34,518 Unfavorable
$8,466 Unfavorable
$34,518 Favorable
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