Rhed 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 December, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,650 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
Actual results for December:
The facility expenses in the flexible budget for December would be closest to:
A) $24,694
B) $24,031
C) $24,260
D) $24,480

Question

Rhed 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 December, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,650 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
 Actual results for December:
 The facility expenses in the flexible budget for December would be closest to:
A) $24,694 
B) $24,031 
C) $24,260 
D) $24,480

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $8,200 + ($4.40 × 3,650) = $24,260

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