Perla Kennel uses tenant-days as its measure of activity; an animal housed in th
ID: 2620953 • Letter: P
Question
Perla 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 March, the kennel budgeted for 2,380 tenant-days, but its actual level of activity was 2,340 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per tenant-day Revenue ? $ 41.60 Wages and salaries $ 3,510 $ 9.10 Food and supplies 1,240 11.80 Facility expenses 10,500 8.40 Administrative expenses 7,500 2.00 Total expenses $ 22,750 $ 31.30 Actual results for March: Revenue $ 96,664 Wages and salaries $ 24,554 Food and supplies $ 29,422 Facility expenses $ 29,196 Administrative expenses $ 12,290 The spending variance for food and supplies in March would be closest to: $570 F $570 U $98 U $98 F
Explanation / Answer
ANswer is $570 U
Flexible Budget=Fixed 1240+ Variable 11.80*2340 28852 Less Actual 29422 570 UnfavorableRelated Questions
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