Item4

Item 4

Vanderhyde 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 3,440 tenant-days, but its actual level of activity was 3,494 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				$	50.00
Wages and salaries	$	5,000		$	8.60
Food and supplies		1,760			16.10
Facility expenses		9,550			7.50
Administrative expenses		9,200			3.20
Total expenses	$	25,510		$	35.40

Actual results for May:

Revenue	$	179,120
Wages and salaries	$	36,528
Foods and supplies	$	56,533
Facility expenses	$	34,635
Administrative expenses	$	20,061

The administrative expenses in the planning budget for May would be closest to:

Multiple Choice

• $19,880

• $19,974

• $20,224

• $20,208

2.

Tysor Framing's cost formula for its supplies cost is $3,110 per month plus $23 per frame. For the month of July, the company planned for activity of 1020 frames, but the actual level of activity was 1026 frames. The actual supplies cost for the month was $26,466. The spending variance for supplies cost in July would be closest to:

Multiple Choice

• $104 U

• $242 F

• $104 F

• $242 U

3.

Gandrud 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 June, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,980 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

	Fixed element per month			Variable element per tenant-day
Revenue				$	45.10
Wages and salaries	$	3,515		$	9.30
Food and supplies		1,630			18.00
Facility expenses		11,350			4.60
Administrative expenses		9,300			2.30
Total expenses	$	25,795		$	34.20

The net operating income in the flexible budget for June would be closest to:

Multiple Choice

• $6,945

• $9,637

• $6,687

• $9,418c