Bobe Air Uses Two Measures of Activity, Flights and Passengers

question 317

Multiple Choice

Bobe 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 $44,580 per month plus $2,390 per flight plus $8 per passenger. The company expected its activity in May to be 68 flights and 211 passengers, but the actual activity was 71 flights and 210 passengers. The actual cost for plane operating costs in May was $215,140. The spending variance for plane operating costs in May would be closest to:

• A)$810 U
• B)$6,352 U
• C)$810 F
• D)$6,352 F

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Definitions:

Collagen

The main structural protein found in skin and other connective tissues, widely used in purified form for cosmetic surgical treatments.

Decubitus

A medical term referring to a body position in which the patient lies down. It also pertains to pressure sores that can develop from prolonged bedrest.

Bedsore

A sore that develops on the body due to prolonged pressure from lying in one position.

Alopecia

A condition causing hair loss from some or all areas of the body, typically the scalp.