Standahl Air Uses Two Measures of Activity, Flights and Passengers

Multiple Choice

Standahl Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $39,990 per month plus $2,689 per flight plus $8 per passenger. The company expected its activity in August to be 86 flights and 298 passengers, but the actual activity was 89 flights and 301 passengers. The actual cost for plane operating costs in August was $257,690.The plane operating costs in the planning budget for August would be closest to:

A) $257,690
B) $273,628
C) $281,719
D) $262,310