Question

The Paris Company provides catering services. The cost of catering supplies is $300 per month plus $100 per job catered plus $25 per meal served. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company budget for May was 27 jobs to be catered and 160 meals to be served. The actual activity for May was 26 jobs catered and 192 meals served, and the actual cost of catering supplies was $7,620.

The cost of catering supplies in Paris' planning budget for the month of May was:

a. $6,700

b. $7,700

c. $7,400

d. $7,000

Answer 1

Answer:

d. $7,000

Explanation:

The computation of the cost of catering supplies in case of planning budget is shown below:

= Cost of catering supplies + cost per job × number of jobs + cost per meal served × number of meals

= $300 + $100 × 27 jobs + $25 × 160 meals

= $300 + $2,700 + $4,000

= $7,000

We simply applied the above formula so that the cost of catering supplies for planning budget could come