Question
Pearse 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 December,
Pearse 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 December, 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 used in its budgeting and its actual results for December:
Data used in budgeting:
Fixed | Variable | |
per month | per tenant-day | |
Revenue | $32.10 | |
Wages & Salaries | $2,400 | $ 7.00 |
Food & Supplies | $ 900 | $11.30 |
Facitlity Expenses | $8,600 | $ 3.50 |
Admin Expenses | $6,700 | $ 0.30 |
Total Expenses | $18,600 | $22.10 |
Actual results for December:
Revenue | $97,978 |
Wages & Salaries | $23,530 |
Food & Supplies | $35,224 |
Facility Expenses | $19,780 |
Admin. Expenses | $ 7,404 |
1. The activity variance (show any unfavorable variance as a negative number) for net operating income in December would be:
2. The net operating income in the planning budget for December would be:
3. The net operating income in the flexible budget for December would be:
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