Bobe Air Uses Two Measures of Activity, Flights and Passengers

question 113

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 activity variance for plane operating costs in May would be closest to:

• A)$6, 352 F
• B)$7, 162 U
• C)$7, 162 F
• D)$6, 352 U

---

Definitions:

Cluster

An assembly of alike items or persons that are closely positioned or take place near each other.

Change Competency

The ability of individuals or organizations to effectively manage, adapt to, and implement change.

Net-zero Impact

An environmental goal where the amount of greenhouse gases emitted is balanced by the amount removed from the atmosphere.

Indra Nooyi

A business executive known for her leadership as the former CEO of PepsiCo, notable for her emphasis on growth and innovation.