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Question #6 Need help FAST Paulis Kennel uses tenant-days as its measure of activity, an animal housed in the kennel for one day is counted
Question #6 Need help FAST
Paulis 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 February, the kennel budgeted for 2,500 tenant- days, but its actual level of activity was 2,480 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February Data used in budgeting: Variable Fixed element element per per month tenant-day $ 35.30 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses $ 2,500 400 8,900 7,800 $ 19,600 $ 5.90 13.80 3.40 0.40 $ 23.50 Actual results for February: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses $ 85,654 $ 16,992 $ 33,084 $ 16,682 $ 8,732 The activity variance for net operating income in February is: $236 U $264 U $264 F $236 F View hint for Question 6 Hide hint for Question 6 Calculate the budgeted contribution margin per unit. Then, multiply the contribution margin per unit amount x the planning budget activity measure, and subtract the total fixed costs. Next, multiply the contribution margin per unit times the flexible budget activity measure, and subtract the total fixed costs. Compare the two results (one for planning budget, one for flexible budget) and calculate the activity variance, which is the difference in the two results Step by Step Solution
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