Sherburne Snow Removal's cost formula for its vehicle operating cost is $2,510 per month plus $371 per snow-day. For the month of March, the company planned for activity of 18 snow-days, but the actual level of activity was 17 snow-days. The actual vehicle operating cost for the month was $8,460. The vehicle operating cost in the flexible budget for March would be closest to:

Sherburne Snow Removal's cost formula for its vehicle operating cost is $2,510 per month plus $371 per snow-day. For the month of March, the company planned for activity of 18 snow-days, but the actual level of activity was 17 snow-days. The actual vehicle operating cost for the month was $8,460. The vehicle operating cost in the flexible budget for March would be closest to:

$8,817

$9,188

$8,460

$8,678

To solve this problem, we need to calculate the vehicle operating cost using the flexible budget approach, which adjusts for the actual level of activity (17 snow-days in this case).

The cost formula is:
\[
\text{Total cost} = \text{Fixed cost} + (\text{Variable cost per snow-day} \times \text{Number of snow-days})
\]
Where:
- **Fixed cost** = $2,510 per month
- **Variable cost per snow-day** = $371
- **Actual number of snow-days** = 17

Let's calculate the flexible budget vehicle operating cost for March:

\[
\text{Flexible Budget Cost} = 2,510 + (371 \times 17)
\]

Now, I'll compute this.The vehicle operating cost in the flexible budget for March would be **$8,817**.

Do you want more details or have any questions?

Here are 5 related questions to expand this information:
1. How does the flexible budget differ from a static budget?
2. What is the importance of separating fixed and variable costs in budgeting?
3. How would the vehicle operating cost change if there were 20 snow-days?
4. How can Sherburne Snow Removal use this information to manage cost control?
5. What would happen if the actual cost deviated significantly from the flexible budget?

**Tip:** In budgeting, using a flexible budget helps adjust costs for actual activity levels, leading to more accurate performance evaluations.

Sherburne Snow Removal's cost formula for its vehicle operating cost is $2,510 per month plus $371 per snow-day. For the month of March, the company planned for activity of 18 snow-days, but the actual level of activity was 17 snow-days. The actual vehicle operating cost for the month was $8,460. The vehicle operating cost in the flexible budget for March would be closest to: $8,817, $9,188, $8,460, or $8,678.

Learn how to calculate Sherburne Snow Removal's vehicle operating cost using flexible budgeting. This detailed solution involves adjusting for 17 snow-days in March and applying a cost formula of $2,510 plus $371 per snow-day. Perfect for business management and accounting professionals.

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