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 facility expenses in the flexible budget for May would be closest to:
A) $19,425
B) $19,600
C) $19,674
D) $19,684

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 facility expenses in the flexible budget for May would be closest to:
A) $19,425 
B) $19,600 
C) $19,674 
D) $19,684

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $8,500 + ($3.70 × 3,020) = $19,674

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