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 administrative expenses in the planning budget for May would be closest to:
A) $6,300
B) $6,302
C) $6,121
D) $6,162

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 administrative expenses in the planning budget for May would be closest to:
A) $6,300 
B) $6,302 
C) $6,121 
D) $6,162

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $6,000 + ($0.10 × 3,000) = $6,300

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