Razor 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 November, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,010 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November:
-The spending variance for expendables in November would be closest to:
A) $240 F
B) $354 F
C) $240 U
D) $354 U

Question

Razor 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 November, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,010 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November: 
-The spending variance for expendables in November would be closest to:
A) $240 F 
B) $354 F 
C) $240 U 
D) $354 U

Quizplus · Accepted Answer

To calculate the spending variance for expendables, we need to use the formula:

Spending Variance = Actual Cost - Budgeted Cost

From the given data, we know that the budgeted cost for expendables was $15,000 and the actual cost was $15,240.

So,

Spending Variance = $15,240 - $15,000 = $240 U

Therefore, the closest answer is (C) $240 U.

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