New York Memorial Diner is a charity supported by donations that provides free m

Question

New York Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for March was based on 2,900 meals, but the diner actually served 3,000 meals. The diner's director has provided the following cost formulas to use in budgets:

The total expense activity variance for the month of March should be:

Fixed Element per Month Variable Element per meal Groceries $0 $2.40 Kitchen operations $5,600 $1.10 Administrative expenses $3,000 $0.30 Fundraising expenses $1,200 $0

Explanation / Answer

Calculate total expense activity variance :

Variable element per meal = 2.4+1.1+0.30 = 3.8

Total expense activity variance= (3000-2900)*3.8 = 380 U

so answer is d) $380 U

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