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 net operating income in the flexible budget for January would be closest to:
A) $6,568
B) $6,021
C) $6,257
D) $7,080

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 net operating income in the flexible budget for January would be closest to:
A) $6,568 
B) $6,021 
C) $6,257 
D) $7,080

Quizplus · Accepted Answer

11eacbfc_c574_baf1_8ffe_57ad74fdf92c_TB7552_00 Net operating income = ($12.80 × 2,060) − $19,800 = $6,568

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