Snyders 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 October, the kennel budgeted for 2,600 tenant-days, but its actual level of activity was 2,610 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
-The activity variance for net operating income in October would be closest to:
A)$2,581 U
B)$99 F
C)$2,581 F
D)$99 U

Question

Snyders 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 October, the kennel budgeted for 2,600 tenant-days, but its actual level of activity was 2,610 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: 
-The activity variance for net operating income in October would be closest to:
A)$2,581 U 
B)$99 F 
C)$2,581 F 
D)$99 U

Quizplus · Accepted Answer

The activity variance for net operating income is calculated based on the difference between the flexible budget and the static budget. A favorable (F) variance indicates that the actual activity level resulted in higher net operating income than expected.

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