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7. Frame Right's cost formula for its supplies cost is $1,700 per month plus $9 per frame. For the month of August, the company planned for activity of 572 frames, but the actual level of activity was 573 frames. The actual supplies cost for the month was $7,080. The supplies cost in the planning budget for August would be closest to: a. $7,748 b. 7,148 c. 6,848 d. 6,648 e. None of the above. The answer is 8. Top Grade Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March. The spending variance for total expenses for March would have been closest to: a. $(5,300) Unfavorable b. 300 Favorable c. 5,300 Favorable d. (300) Unfavorable e. None of the above. The answer is 9. 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 $40,000 per month plus $3,000 per flight plus $4 per passenger. The company expected its activity in August to be 82 flights and 294 passengers, but the actual activity was 85 flights and 297 passengers. The actual cost for plane operating costs in August was \$255,690. The activity variance for plane operating costs in August would be closest to: a. $(9,012) Unfavorable c. \$ (7,959) Unfavorable b. 9,012 Favorable d. 7,959 Favorable e. None of the above. The answer is

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