Reference no: EM132603067

Question 1: A commuter bus company uses two measures of activity, routes and commuters, in the cost formulas in its budgets and performance reports. The cost formula for bus operating costs is $56,870 per month plus $2,890 per route plus $16 per commuter. The company expected its activity in November to be 86 routes and 257 commuters, but the actual activity was 95 routes and 263 commuters. The actual cost for bus operating costs in November was $305,100. The spending variance for bus operating costs in November would be closest to:

Multiple Choice

Option 1: $4,422 Favorable

Option 2: $4,422 Unfavorable

Option 3: $30,528 Favorable

Option 4: $26,106 Favorable

Option 5: $30,528 Unfavorable