Courington Detailing's cost formula for its materials and supplies is $2,420 per month plus $9 per vehicle. For the month of August, the company planned for activity of 63 vehicles, but the actual level of activity was 33 vehicles. The actual materials and supplies for the month was $2,840.The materials and supplies in the planning budget for August would be closest to:
A) $5,422
B) $2,840
C) $2,987
D) $2,717

Question

Quizplus · Accepted Answer

The materials and supplies in the planning budget for August would be closest to $2,987. This is calculated as the fixed cost of $2,420 plus the variable cost of $9 per vehicle multiplied by the planned activity of 63 vehicles.

Courington Detailing's Cost Formula for Its Materials and Supplies Is