Question

Dinham 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 March, the kennel budgeted for 4,200 tenant-days, but its actual level of activity was 4,240 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 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses $ 3,100 2,100 8,600 7,100 $ 20,900 Variable element per tenant-day $35.10 $ 8.10 14.60 3.60 0.60 $26.90 Actual results for March: Revenue Wages and salaries Food and supplies Facility evnenses $ 136,130 $ 28,610 $ 64,325 2250

Answer 1

Answer is $321 U

Actual Level of Activity = 4,240 tenant days

Flexible Budget for Food and Supplies = $2,100 + $14.60 * Number of tenant days
Flexible Budget for Food and Supplies = $2,100 + $14.60 * 4,240
Flexible Budget for Food and Supplies = $64,004

Actual Results for Food and Supplies = $64,325

Spending Variance for Food and Supplies = Actual Results for Food and Supplies - Flexible Budget for Food and Supplies
Spending Variance for Food and Supplies = $64,325 - $64,004
Spending Variance for Food and Supplies = $321 Unfavorable