Thomas Air uses the following cost formula for plane operating costs in its budg

Question

Thomas Air uses the following cost formula for plane operating costs in its budgets and performance reports: $40,000 per month plus $2000 per flight. The company expected its activity in April to be 74 flights, but the actual activity was 70 flights. The actual cost for plane operating costs in April was $183,000.

a. What is the planning budget cost?

b. What is the flexible budget cost?

c. What is the activity variance?

d. What is the spending variance?

* They didn't provide a number of passengers*

Explanation / Answer

a) Planning budget cost 40,000+2000*74 188000 b) Flexible budget cost 40,000+2000*70 180000 c) Activity variance flexible budget - planning budget 180,000-188,000 8000 F d) Spending variance Actual costs - flexible budget 183,000-180,000 3000 U

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.