Question

Assume that a company's cost formula for its materials and supplies is $2,040 per month plus $9 per vehicle. For the month of August, the company planned for activity of 99 vehicles, but the actual level of activity was 59 vehicles. The actual materials and supplies for the month was $2,890. The materials and supplies in the planning budget for August would be closest to:

Answer 1

Answer:

$2,931

Explanation:

                        Actual         Planning Budget

Materials          $2,890             $2,040

Vehicle             $531 (59*$9)    $891 (99*$9)

Total                 $3,421               $2,931

Hence, the total amount of materials and supplies in the planning budget for August is $2,931