Time remalning: 2.13.32 as its meosure of activity, an animal housed in the kenn

Question

Time remalning: 2.13.32 as its meosure of activity, an animal housed in the kennel for one day is counted as one tenant- day s 2.980 tenant-days. The kennel has Pearse Kennel uses tenont- days During December, the kennel budgeted for 3000 tenant days, but its actual level of activity wa provided the followin Data used in budgeting g data concerning the formulas used in its bucdgeting and its actuol results for December Vaniable Fixed element peri element per month Revenue Wages and salanes Food and supphes Faciaty expenses Administrative expenses Total expenses 5 2400 900 8,600 6 700 S 18,600 tenarit doy S3210o 5700 1130 3.50 030 $ 2210 Actuol results for December Revenue Wages and salarles Food and supplies Faclity expenses Admnistrative expenses $ 9797 $ 23.530 S35,224 $19780 S 7404 The overali revenue and spending variance lle the variance for net operating ncome in the revenue and spending variance column on the flexible budget performance reporm) for December would be closest to O S640 U O $640 F O $840 u O $840 F

Explanation / Answer

Solution: 840 F

Working;

Revenue

97,978

Wages and salaries

23,530

Food and supplies

35,224

Facility expenses

19,780

Administrative expenses

7,404

85938

Net operating income

12,040

Revenue per tenant-day

32.1

Total variable expense per tenant-day

22.1

Contribution margin per tenant-day

10

Total fixed expense

18,600

Actual net operating income

12,040

Flexible budget

11,200

10*2980-18600

Activity variance

840

Favorable

Revenue

97,978

Wages and salaries

23,530

Food and supplies

35,224

Facility expenses

19,780

Administrative expenses

7,404

85938

Net operating income

12,040

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