Niforos Air Uses Two Measures of Activity, Flights and Passengers

Multiple Choice

Niforos 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 $41,380 per month plus $2,282 per flight plus $14 per passenger. The company expected its activity in August to be 77 flights and 264 passengers, but the actual activity was 78 flights and 261 passengers. The actual cost for plane operating costs in August was $216,740. The plane operating costs in the flexible budget for August would be closest to:

A) $220,790
B) $223,030
C) $223,657
D) $216,740