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: The food and supplies in the flexible budget for January would be closest to:
A) $41,726
B) $42,243
C) $41,018
D) $41,130

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:  The food and supplies in the flexible budget for January would be closest to:
A) $41,726 
B) $42,243 
C) $41,018 
D) $41,130

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $900 + ($14.90 × 2,740) = $41,726

Knapper Kennel Uses Tenant-Days as Its Measure of Activity; an Animal