Asked by Breanna Beaver on Jul 25, 2024
Verified
Courington Detailing's cost formula for its materials and supplies is $1,970 per month plus $8 per vehicle. For the month of August, the company planned for activity of 92 vehicles, but the actual level of activity was 57 vehicles. The actual materials and supplies for the month was $2,650.The materials and supplies in the planning budget for August would be closest to:
A) $2,706
B) $2,426
C) $4,297
D) $2,650
Planning Budget
A budget created before a period begins, outlining expected revenues, expenses, and other financial transactions, serving as a blueprint for financial performance.
Materials
General term referring to the raw inputs or resources used in the production of goods and services, encompassing both direct and indirect materials.
- Analyze and select blueprints for planning, adaptable, and real financial allocations.
- Evaluate operational achievements by assessing variances concerning budget allocation, process involvement, and overall differences.
Verified Answer
NS
Nurul ShahmirahJul 26, 2024
Final Answer :
A
Explanation :
First, we need to calculate the total cost that the company planned for in August:
Total cost = $1,970 + ($8 x 92) = $1,970 + $736 = $2,706
Next, we can use this total cost to calculate the planned materials and supplies cost per vehicle:
Planned materials and supplies cost per vehicle = Total cost / Number of vehicles
Planned materials and supplies cost per vehicle = $2,706 / 92 = $29.50
Finally, we can use the planned materials and supplies cost per vehicle to calculate the planned total materials and supplies cost for August:
Planned total materials and supplies cost = Planned materials and supplies cost per vehicle x Actual number of vehicles
Planned total materials and supplies cost = $29.50 x 57 = $1,678.50
Since the actual materials and supplies cost for the month was $2,650, we can see that the company spent more than it planned.
Total cost = $1,970 + ($8 x 92) = $1,970 + $736 = $2,706
Next, we can use this total cost to calculate the planned materials and supplies cost per vehicle:
Planned materials and supplies cost per vehicle = Total cost / Number of vehicles
Planned materials and supplies cost per vehicle = $2,706 / 92 = $29.50
Finally, we can use the planned materials and supplies cost per vehicle to calculate the planned total materials and supplies cost for August:
Planned total materials and supplies cost = Planned materials and supplies cost per vehicle x Actual number of vehicles
Planned total materials and supplies cost = $29.50 x 57 = $1,678.50
Since the actual materials and supplies cost for the month was $2,650, we can see that the company spent more than it planned.
Learning Objectives
- Analyze and select blueprints for planning, adaptable, and real financial allocations.
- Evaluate operational achievements by assessing variances concerning budget allocation, process involvement, and overall differences.
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