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 facility expenses in the flexible budget for January would be closest to:
A) $24,793
B) $24,023
C) $24,070
D) $24,953

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 facility expenses in the flexible budget for January would be closest to:
A) $24,793 
B) $24,023 
C) $24,070 
D) $24,953

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $9,500 + ($4.70 × 3,090) = $24,023

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