Question

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 4,000 tenant-days, but its actual level of activity was 3,980 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:

	Fixed element per month			Variable element per tenant-day
Revenue		-		$	30.50
Wages and salaries	$	3,000		$	6.50
Food and supplies		400			11.30
Facility expenses		8,000			3.50
Administrative expenses		7,800			0.50
Total expenses	$	19,200		$	21.80

Actual results for February:

Revenue	$	107,780
Wages and salaries	$	23,500
Food and supplies	$	36,790
Facility expenses	$	19,250
Administrative expenses	$	9,140

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

Answer 1

Ans Flexible Budget for February Tenant Days 3980 121390 (3980 * 30.50) 25870 44974 13930 1990 86764 Revenue Varibale Cost(Tenant Days x Cost per Unit) Wages and salaries Food and supplies Facility expenses Administrative expenses Fixed Cost(Given) Wages and salaries Food and supplies Facility expenses Administrative expenses Net Income 3000 400 8000 7800 19200 15426