Towne Snow Removal's cost formula for its vehicle operating cost is $1,470 per month plus $399 per snow-day. For the month of November, the company planned for activity of 13 snow-days, but the actual level of activity was 9 snow-days. The actual vehicle operating cost for the month was $5,230. The vehicle operating cost in the flexible budget for November would be closest to:
A)$6,657
B)$5,230
C)$4,609
D)$5,061

Question

Quizplus · Accepted Answer

The flexible budget cost is calculated using the actual level of activity: $1,470 + ($399 * 9) = $5,061.

Towne Snow Removal's Cost Formula for Its Vehicle Operating Cost