Lynne Catering Uses Two Measures of Activity, Jobs and Meals

question 37

Multiple Choice

Lynne Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $480 per month plus $91 per job plus $14 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in June to be 10 jobs and 79 meals, but the actual activity was 14 jobs and 77 meals. The actual cost for catering supplies in June was $2,970. The catering supplies in the flexible budget for June would be closest to:

• A)$2,496
• B)$2,970
• C)$2,832
• D)$3,494

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Definitions:

Efficient Use

Utilizing resources in a manner that maximizes the production of goods and services without waste.

Economy's Resources

The total means available for the production and consumption of goods and services, including labor, capital, land, and entrepreneurship.

Market Economies

Economic systems where supply, demand, and prices are driven by decisions made by consumers and businesses rather than central planning.

Coerce

To compel someone to act in a certain way by using force or threats.