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

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Accounting

Paulis 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 4,900 tenant-days, but its actual level of activity was 4,880 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

Data used in budgeting:

Fixed element per month Variable element per tenant-day
Revenue - $ 31.40
Wages and salaries $ 3,900 $ 7.40
Food and supplies 500 12.20
Facility expenses 8,900 4.40
Administrative expenses 8,700 0.20
Total expenses $ 22,000 $ 24.20

Actual results for February:

Revenue $ 108,680
Wages and salaries $ 23,590
Food and supplies $ 36,799
Facility expenses $ 19,340
Administrative expenses $ 9,158

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 February would be closest to:

Garrison 16e Rechecks 2018-08-12

Multiple Choice

  • $6,513 U

  • $6,513 F

  • $6,657 U

  • $6,657 F

Answer & Explanation Solved by verified expert
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