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Question - So 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 $56,900 per month plus $2,876 per route plus $15 per commuter. The company expected its activity in November to be 87 routes and 256 commuters, but the actual activity was 95 routes and 263 commuters. The actual cost for bus operating costs in November was $305,100. What the spending variance for bus operating costs in November?
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This individual assignment is based on the TerraCycle Inc.
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A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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