Question
Caniff Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane
Caniff 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 $57,060 per month plus $2,638 per flight plus $8 per passenger. The company expected its activity in February to be 69 flights and 274 passengers, but the actual activity was 68 flights and 275 passengers. The actual cost for plane operating costs in February was $237,330. The plane operating costs in the planning budget for February would be closest to:
$241,274 $239,968 $238,644 $237,330
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