Roye Kennel uses tenant-days as its measure of activity; an animal housed in the

Question

Roye 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 September, the Kennel budgeted for 3,200 tenant-days, but its actual level of activity was 3,250 tenant-days. The Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

$16,900

$23.50     

Actual results for September:

The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for September would be closest to:

Multiple Choice

$6,795 U

$7,325 F

$7,325 U

$6,795 F

Roye 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 September, the Kennel budgeted for 3,200 tenant-days, but its actual level of activity was 3,250 tenant-days. The Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Explanation / Answer

Answer is $ 7325 U Performance report Standard Actual Spending variance Revenue 110825 107351 3474 Unfav Less: expense Wages and salaries 25175 28510 3335 Unfav Expendables 45300 46025 725 Unfav Facility expenses 16050 15500 550 Fav Admin expense 6750 7091 341 Unfav Net income 17550 10225 7325 Unfav

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