Question

Dirham Kennel uses tenant-days as its measure of activity, an animal housed in the kernel for one day is counted as one tenant day. During March, the kennel budgeted for 2.000 tenant days, but its actual level of activity was 2040 tenant days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting Fixed element per month Variable element per tenant-day $35.40 $ 6.60 12.20 $ 3,00 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses 9,600 $20,800 $21.30 Actual results for March: $69,576 $16,20 Mages and salaries Food and supplies Facility expenses Administrative expenses $14,122 $ 8,238 The revenue variance for March would be closest to

Answer 1

Solution:

Revenue variance = Actual Revenue - Expected revenue

= $69576 - (2000*$35.40)

= $1,224 U