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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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