Canniff 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 $56,960 per month plus $2,634 per flight plus $6 per passenger. The company expected its activity in February to be 67 flights and 270 passengers, but the actual activity was 66 flights and 271 passengers. The actual cost for plane operating costs in February was $231,250. The plane operating costs in the planning budget for February would be closest to:

Actual Operating costs         $231,250  

Planned Operating Costs  budgeted = $ 235058

Planned Operating Costs at actual level   = $ 232430

Explanation:

The Planned costs are the costs estimated at the planned level of activity.

The actual costs are costs that actually occur.

But flexible costs are those which are planned ( determined) at actual level of activity.

Canniff Air

                                       Actual                 Planned

Operating costs         $231,250              

The cost formula for plane operating costs is $56,960 per month plus $2,634 per flight plus $6 per passenger.

Planned Operating Costs= $56,960+ 2634 *67 flights + 6*270 passengers

                                        = $ 56960 + 176478+ 1620

                                         = $ 235058

Actual Operating Costs = $56,960+ 2634 *66 flights + 6*271 passengers

                                         = $ 56960 + 173844+ 1626

                                         = $ 232430

We put the values in the given formula to obtains these costs both planned and actual.

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.