Dallas Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day. For the month of January, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $7,720. The vehicle operating cost in the static or planning budget for January would be closest to:_______

Respuesta :

Answer:

$6,956

Explanation:

Given that,

Vehicle operating cost = $2,060 per month

Vehicle operating cost = $306 per snow-day

Planned for activity = 16 snow-days

Actual level of activity = 18 snow-days

Actual vehicle operating cost for the month = $7,720

Vehicle operating cost:

= Fixed cost + (variable cost per snow day × planned snow days)

= $2,060 per month + ($306 × 16 days)

= $2,060 + $4,896

= $6,956