Tessmer 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 3,100 tenant-days, but its actual level of activity was 3,090 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 food and supplies in the flexible budget for January would be closest to:
A) $32,945
B) $32,590
C) $32,380
D) $33,050

Question

Tessmer 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 3,100 tenant-days, but its actual level of activity was 3,090 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 food and supplies in the flexible budget for January would be closest to:
A) $32,945 
B) $32,590 
C) $32,380 
D) $33,050

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $500 + ($10.50 × 3,090) = $32,945

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