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 4,600 tenant-days, but its actual level of activity was 4,670 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 Variable element per tenant-day $35.10 element per month Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses $ 3,500 $ 8.50 1,000 9,000 15.00 4.00 7,500 $21,000 0.40 Total expenses $27.90 Actual results for March: $143,330 $ 28,650 $ 71,345 $ 27.130 $ 7,105 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses The spending variance for food and supplies in March would be closest to

Answer 1

Spending variance for foods and supplies = Flexible budget cost-actual Cost

= (4670*15+1000)-71345

Spending variance for foods and supplies = 295 U

So answer is a) $295 U