Meinke 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 April, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April:
Data used in budgeting:
Actual results for April:

-The administrative expenses in the planning budget for April would be closest to:
A) $7,972
B) $8,052
C) $7,980
D) $8,096

Question

Meinke 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 April, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April:
Data used in budgeting:
  Actual results for April:
 
-The administrative expenses in the planning budget for April would be closest to:
A) $7,972 
B) $8,052 
C) $7,980 
D) $8,096

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $6,500 + ($0.40 × 3,700) = $7,980

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