Reference no: EM132535904

Question 1: The Latiker 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 $2,882 per route plus $17 per commuter. The company expected its activity in November to be 88 routes and 260 commuters, but the actual activity was 93 routes and 264 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: $14,478 Favorable

Option 2: $24,314 Unfavorable

Option 3: $9,836 Favorable

Option 4: $9,836 Unfavorable

Option 5: $24,314 Favorable