Gorley Kennel uses tenant-days as its measure of activity; an animal housed in t

Question

Gorley Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During February, the kennel budgeted for 3,900 tenant-days, but its actual level of activity was 3,940 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

The activity variance for wages and salaries in February would be closest to:

a. $1,152 U b. $1,152 F c. $292 U d. $292 F

Gorley Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During February, the kennel budgeted for 3,900 tenant-days, but its actual level of activity was 3,940 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The activity variance for wages and salaries in February would be closest to: a. $1,152 U b. $1,152 F c. $292 U d. $292 F

Explanation / Answer

Activity variance is (3,940-3,900)*7.30= 292F (F since actual was greater than budget).

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