Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $550 per month plus $77 per job plus $13 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in September to be 18 jobs and 148 meals, but the actual activity was 14 jobs and 145 meals. The actual cost for catering supplies in September was $3,340. The catering supplies in the planning budget for September would be closest to:
A) $3,890
B) $3,860
C) $3,340
D) $3,513

Question

Quizplus · Accepted Answer

The planning budget cost is calculated using the expected activity levels: $550 + ($77 * 18 jobs) + ($13 * 148 meals) = $3,860.

Wember Catering Uses Two Measures of Activity, Jobs and Meals