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

question 89

Multiple Choice

Ofarrell Snow Removal's cost formula for its vehicle operating cost is $1,840 per month plus $377 per snow-day. For the month of November, the company planned for activity of 14 snow-days, but the actual level of activity was 19 snow-days. The actual vehicle operating cost for the month was $9,280. The vehicle operating cost in the flexible budget for November would be closest to:

• A) $9,003
• B) $7,118
• C) $9,280
• D) $9,660

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Definitions:

Possession

Possession refers to the act of having or holding property in one's power or control, whether owned or not.

Financing Statement

A document filed to give public notice to third parties of a secured party's interest in the collateral provided by a debtor.

Equipment

Machinery or tools necessary for a particular activity, task, or for the operation of a business.

Secured Creditor

A creditor that has a legal interest, usually called a lien, in a debtor’s property, securing the debt and giving the creditor rights to the property if the debt is not repaid.