Venanzi Air Uses Two Measures of Activity, Flights and Passengers

Multiple Choice

Venanzi 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 $40,720 per month plus $2,646 per flight plus $11 per passenger. The company expected its activity in September to be 62 flights and 288 passengers, but the actual activity was 64 flights and 289 passengers. The actual cost for plane operating costs in September was $214,430. The activity variance for plane operating costs in September would be closest to:

A) $6,490 U
B) $5,303 F
C) $6,490 F
D) $5,303 U