Question
Hubbard 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 January,
Hubbard 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 January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Fixed Element per Month Variable element per tenant-day Revenue - $ 31.10 Wages and salaries $ 2,300 $ 7.20 Food and supplies 1,000 8.10 Facility expenses 9,500 2.70 Administrative expenses 7,000 0.30 Total expenses $ 19,800 $ 18.30 Actual results for January: Revenue $ 63,606 Wages and salaries $ 17,282 Food and supplies $ 18,346 Facility expenses $ 14,432 Administrative expenses $ 7,408 The net operating income in the flexible budget for January would be closest to:
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