Herrod 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 $570 per month plus $98 per job plus $24 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 December to be 11 jobs and 98 meals, but the actual activity was 14 jobs and 102 meals. The actual cost for catering supplies in December was $4,500. The spending variance for catering supplies in December would be closest to:

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fatimakincsem fatimakincsem · Answer 1 · 2019-08-05T04:47:45+02:00

Answer:

The correct answer would be $3998

Explanation:

Catering supplies = $570 per month

$98 per job Activity

$24 per meal

Expected activities OR Planning Budget of catering supplies would be:

Expected Job activity= 11

Expected Meals = 98

So Cost associated with them are as follows:

Expected Job Activity cost = 11 * 98

= $1078

Expected Meal Cost = 98 * 24

= $2350

Now Total catering supplies in the planning budget for December would be:

Catering Supplies + Expected Job Activity Cost + Expected Meal Cost

= 570 + 1078 + 2350

= $3998