Chuck Berry Kennel uses tenant-days as its measure of activity; an animal housed

Question

Chuck Berry 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 December, the kennel budgeted for 4,700 tenant-days, but its actual level of activity was 4,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

$21,200

$24.00     

Actual results for December:

The net operating income in the planning budget for December would be closest to:

$12,496

$12,640

$19,639

$19,545

Chuck Berry 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 December, the kennel budgeted for 4,700 tenant-days, but its actual level of activity was 4,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Explanation / Answer

Calculate net operating income under planning budget :

so answer is b) $12640

Revenue (4700*31.20) 146640 Expense Total expense (4700*24+21200) 134000 Net operating income 12640

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