Hubbard 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 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting:
Actual results for January:
The facility expenses in the flexible budget for January would be closest to:
A) $14,157
B) $14,712
C) $15,170
D) $15,062

Question

Hubbard 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 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting:
 Actual results for January:
 The facility expenses in the flexible budget for January would be closest to:
A) $14,157 
B) $14,712 
C) $15,170 
D) $15,062

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $9,500 + ($2.70 × 2,060) = $15,062

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