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