Question
Deep Purple 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
Deep Purple 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 3,800 tenant-days, but its actual level of activity was 3,830 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 | $34.70 | |
Wages and salaries | $2,700 | $7.70 |
Food and supplies | 1,700 | 14.20 |
Facility expenses | 8,200 | 3.20 |
Administrative expenses | 6,700 | 0.20 |
Total expenses | $19,300 | $25.30 |
Actual results for February:
Revenue | $120,321 |
Wages and salaries | $28,570 |
Food and supplies | $56,975 |
Facility expenses | $19,989 |
Administrative expenses | $7,097 |
The spending variance for food and supplies in February would be closest to:
a.) $889 U
b.) $1,315 U
c.) $1,315 F
d.) $889 F
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