Gordin 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 May, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,020 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
Actual results for May:
The activity variance for administrative expenses in May would be closest to:
A) $2 F
B) $2 U
C) $138 U
D) $138 F

Question

Gordin 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 May, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,020 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
 Actual results for May:
 The activity variance for administrative expenses in May would be closest to:
A) $2 F 
B) $2 U 
C) $138 U 
D) $138 F

Quizplus · Accepted Answer

11eacbfc_c595_fe82_8ffe_a50e6ebd6924_TB7552_00 Because the flexible budget is greater than the planning budget, the variance is unfavorable (U).

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