Kari 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, 200 tenant-days, but its actual level of activity was 3, 230 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)$7, 879
B)$7, 806
C)$7, 960
D)$7, 969

Question

Kari 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, 200 tenant-days, but its actual level of activity was 3, 230 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)$7, 879 
B)$7, 806 
C)$7, 960 
D)$7, 969

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $7, 000 + ($0.30 × 3, 200)= $7, 960

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