Question
The Latiker commuter bus company uses two measures of activity, routes and commuters, in the cost formulas in its budgets and performance reports. The cost
The Latiker commuter bus company uses two measures of activity, routes and commuters, in the cost formulas in its budgets and performance reports. The cost formula for bus operating costs is $56,850 per month plus $2,890 per route plus $15 per commuter. The company expected its activity in November to be 88 routes and 259 commuters, but the actual activity was 94 routes and 269 commuters. The actual cost for bus operating costs in November was $305,100. The spending variance for bus operating costs in November would be closest to:
a) $27,445 Favorable
b) $9,955 Favorable
c) $9,955 Unfavorable
d) $17,490 Favorable
e) $27,445 Unfavorable
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