Orscheln Snow Removal's Cost Formula for Its Vehicle Operating Cost

question 74

Multiple Choice

Orscheln Snow Removal's cost formula for its vehicle operating cost is $2,800 per month plus $381 per snow-day.For the month of February,the company planned for activity of 17 snow-days,but the actual level of activity was 14 snow-days.The actual vehicle operating cost for the month was $7,920.The activity variance for vehicle operating cost in February would be closest to:

• A)$1,357 F
• B)$1,357 U
• C)$1,143 F
• D)$1,143 U

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Definitions:

Net Income

Represents the amount of earnings left over after all expenses, taxes, and costs have been deducted from total revenue, often considered a key indicator of a company's profitability.

Net Loss

A financial situation where a company's total expenses exceed its total revenues in a specific accounting period, leading to a decrease in equity.

Balance Sheet

A financial statement that shows the assets, liabilities, and equity of a company at a specific point in time, providing a snapshot of its financial condition.

Adjusted Trial Balance

A statement listing all accounts and their balances after adjustments have been made, serving as the basis for financial statements.