1a) True or False: Differences between the static planning budget and the flexible budget show what should have happened because the actual level of activity differed from what had been planned.

1b)

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:

Multiple Choice

a) $22,852

b) $21,996

c) $22,653

d) $22,660