Question

Kasey 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 2,260 tenant-days, but its actual level of activity was 2,220 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
Revenue		?		$	35.60
Wages and salaries	$	4,080		$	7.90
Food and supplies		1,890			9.40
Facility expenses		7,050			6.00
Administrative expenses		11,050			0.80
Total expenses	$	24,070		$	24.10

Actual results for March:

Revenue	$	78,472
Wages and salaries	$	21,428
Food and supplies	$	23,268
Facility expenses	$	19,470
Administrative expenses	$	12,876

The activity variance for wages and salaries in March would be closest to:

$506 F

$316 F

$506 U

$316 U

Answer 1

The answer is 506 F

Units			2,260	2,220
	Fixed Element per month	Variable element per tenant-day	Budget	Actual	Variance
Revenue		35.60	80,456.00	78,472.00	1,984.00
Wages and salaries	4,080.00	7.90	21,934.00	21,428.00	506.00
Food and supplies	1,890.00	9.40	23,134.00	23,268.00	(134.00)
Facility expenses	7,050.00	6.00	20,610.00	19,470.00	1,140.00
Administrative expenses	11,050.00	0.80	12,858.00	12,876.00	(18.00)
Total expenses	24,070.00	24.10	78,536.00	77,042.00	1,494.00
			1,920.00	1,430.00	490.00

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