Rhed Kennel uses tenant-days as its measure of activity; an animal housed in...
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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 3,950 tenant-days, but its actual level of activity was 3,900 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
-
$
34.40
Wages and salaries
$
2,700
$
8.20
Food and supplies
1,650
13.40
Facility expenses
8,700
4.90
Administrative expenses
6,700
0.70
Total expenses
$
19,750
$
27.20
Actual results for December:
Revenue
$
133,565
Wages and salaries
$
34,960
Food and supplies
$
52,855
Facility expenses
$
27,935
Administrative expenses
$
8,425
The activity variance for administrative expenses in December would be closest to:
Multiple Choice
$35 U
$1,040 U
$35 F
$1,040 F
Answer & Explanation
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