Knapper Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one
Question:
Knapper 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 January, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,740 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
Fixed Element per Month | Variable element per tenant-day | ||||
Revenue | | - | | $ | 37.00 |
| | | | | |
Wages and salaries | $ | 3,800 | | $ | 6.10 |
Food and supplies | | 900 | | | 14.90 |
Facility expenses | | 9,700 | | | 4.80 |
Administrative expenses | | 6,600 | | | 0.10 |
Total expenses | $ | 21,000 | | $ | 25.90 |
The facility expenses in the flexible budget for January would be closest to:
a. $21,996
b. $22,660
c. $22,852
d. $22,653
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins