1 1 Dermody Snow Removals cost formula for its vehicle opera

Dermody Snow Removals cost formula for its vehicle operating cost is $2.980 per month plus $328 per snow-day. For the month of December the company planned for activity of 22 sm actus venicte operating cost for the month was $10.490. The spending variance for vehicle o ow-days, but the actual level of activity was 20 snow-days. The be closest to

Solution

Solution :

Budgeted operating cost = $2980 + $328 * Level of Activity

Actual level of activity = 20 Snow days

Spending Variance =Standard cost at 20 Snow days - Actual Operating Cost

= ($2980+328*20) - $10490

= $9540 - $10490

= $950 U

Hence, 3rd option is correct.