Sissac Catering uses two measures of activity, jobs and meals, in the cost formu
ID: 2444597 • Letter: S
Question
Sissac 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 $560 per month plus $105 per job plus $21 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 May to be 13 jobs and 122 meals, but the actual activity was 8 jobs and 127 meals. The actual cost for catering supplies in May was $3,950. The spending variance for catering supplies in May would be closest to: $117 F $117 U $537 U $537 F
Explanation / Answer
Sissac Catering uses two measures of activity, jobs and meals, in the cost formulas in its