tour company uses two measures of activity, routes and passengers in its cost formulas used for budgeting and performance evaluation. The costformula for tour operating costs is $56,880 per month plus $2,880 per route plus $15 per passenger. The company expected in August to perform 90routes and serve 256 passengers, but the actual activity was 96 routes and 263 passengers. The actual tour operating costs in August was $305,100. Thespending variance for tour operating costs in August would be closest to:Multiple Choice$32,205 Unfavorable$32,205 Favorable$14,820 Unfavorable$17,385 Favorable$14,820 FavorableOOO

Spending variance is calculated by deducting the actual expenses from the flexible budget of the…

tour company uses two measures of a ormula for tour operating costs is $56,880 pe outes and serve 256 passengers, but the actua spending variance for tour operating costs in A Multiple Choice $3 $22.305 Infavorab

tour company uses two measures of a ormula for tour operating costs is $56,880 pe outes and serve 256 passengers, but the actua spending variance for tour operating costs in A Multiple Choice $3 $22.305 Infavorab

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 33P

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Question

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 $2,880 per route plus $15 per passenger. The company expected in August to perform 90
routes and serve 256 passengers, but the actual activity was 96 routes and 263 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
$32,205 Unfavorable
$32,205 Favorable
$14,820 Unfavorable
$17,385 Favorable
$14,820 Favorable
O
O
O

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