Rhed Kennel uses tenant-days as its measure of activity; an animal housed in the kennel...
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Accounting
Rhed 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 4,600 tenant-days, but its actual level of activity was 4,550 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:
Fixed element per month
Variable element per tenant-day
Revenue
-
$
35.70
Wages and salaries
$
4,000
$
9.50
Food and supplies
2,300
14.70
Facility expenses
10,000
6.20
Administrative expenses
8,000
0.80
Total expenses
$
24,300
$
31.20
Actual results for December:
Revenue
$
161,570
Wages and salaries
$
47,510
Food and supplies
$
68,065
Facility expenses
$
38,400
Administrative expenses
$
8,620
The activity variance for administrative expenses in December would be closest to:
Answer & Explanation
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