Neighbors 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 April, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,960 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting:
Actual results for April:
The activity variance for net operating income in April would be closest to:
A) $126 F
B) $126 U
C) $364 F
D) $364 U

Question

Neighbors 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 April, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,960 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting:
 Actual results for April:
 The activity variance for net operating income in April would be closest to:
A) $126 F 
B) $126 U 
C) $364 F 
D) $364 U

Quizplus · Accepted Answer

11eacbfc_c5ab_a90a_8ffe_37368a6fb1c3_TB7552_00 11eacbfc_c5ab_d01b_8ffe_899aaa7c39f6_TB7552_00 Because the flexible budget net operating income is less than the planning budget, the variance is unfavorable (U).

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