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WHAT WOULD THE SPENDING VARIANCE FOR PLANE OPERATING COSTS IN AUGUST BE?

WHAT WOULD THE SPENDING VARIANCE FOR PLANE OPERATING COSTS IN AUGUST BE?

Company X uses 2 measures of activity flights and passengers in the cost formulas for its budget and performance reports. The cost formula for plane operating costs is $44 580 per month plus $2 390 per flight plus $8 per passenger. The company expected it’s activity for August to be 68 flights with 211 passengers but the actual activity for the month was 71 flights with 210 passengers. The actual cost for plane operating costs in August was $214 140.What would the spending variance for plane operating costs in August be? Would it be favorable or unfavorable?

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