Thomasson Air uses two measures of activity, flights and passengers, in the cost

Question

Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,340 per month plus $2,078 per flight plus $1 per passenger. The company expected its activity in April to be 94 flights and 244 passengers, but the actual activity was 93 flights and 249 passengers. The actual cost for plane operating costs in April was $226,510. The activity variance for plane operating costs in April would be closest to:

Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,340 per month plus $2,078 per flight plus $1 per passenger. The company expected its activity in April to be 94 flights and 244 passengers, but the actual activity was 93 flights and 249 passengers. The actual cost for plane operating costs in April was $226,510. The activity variance for plane operating costs in April would be closest to:

Explanation / Answer

Choose D) $ 2,073 U . Compute first Operating cost for expected then subtract total amount from actual operating cost for april.

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