Question
Galante 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 May,
Galante 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 May, the Kennel budgeted for 3,300 tenant-days, but its actual level of activity was 3,280 tenant-days. The Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: |
Data used in budgeting:
Fixed element per month | Variable element per tenant-day | |
Revenue | $29.80 | |
Wages and salaries | $2,300 | $5.80 |
Expendables | 500 | 10.60 |
Facility expenses | 7,300 | 2.80 |
Administrative expenses | 7,100 | 0.40 |
Total expenses | $17,200 | $19.60 |
Actual results for May:
Revenue | $107,080 |
Wages and salaries | $23,430 |
Expendables | $36,783 |
Facility expenses | $19,180 |
Administrative expenses | $9,126 |
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 May would be closest to: |
A) $2,101 F
B) $2,305 F
C) $2,101 U
D) $2,305 U
Please prove your answer
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