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 facility expenses in the flexible budget for January would be closest to:
A) $22,660
B) $21,996
C) $22,653
D) $22,852

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 facility expenses in the flexible budget for January would be closest to:
A) $22,660 
B) $21,996 
C) $22,653 
D) $22,852

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $9,700 + ($4.80 × 2,740) = $22,852

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