Question

Larance Detailing's cost formula for its materials and supplies is $2,230 per month plus $1 per vehicle. For the month of November, the company planned for activity of 75 vehicles, but the actual level of activity was 25 vehicles. The actual materials and supplies for the month was $2,160. The materials and supplies in the flexible budget for November would be closest to:A) $145 FB) $145 UC) $95 FD) $95 U

Answer 1

Answer:

C) $95 F

Explanation:

Planned cost of materials and supplies = $2,230

Actual cost of materials and supplies = $2,160

Flexible budget for November = $2,230 - $2,285 + 25 =  $95 F.

It is is favorable (F) because Actual cost of materials and supplies is less than the Planned cost of materials and supplies.