Nicolini 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 2,200 tenant-days, but its actual level of activity was 2,250 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Data used in budgeting:

Actual results for October:

-The food and supplies in the flexible budget for October would be closest to:
A)$27,775
B)$26,571
C)$27,793
D)$27,180

Question

Nicolini 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 2,200 tenant-days, but its actual level of activity was 2,250 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Data used in budgeting:

Actual results for October:

-The food and supplies in the flexible budget for October would be closest to:

Data used in budgeting:

Actual results for October:

-The food and supplies in the flexible budget for October would be closest to:
A)$27,775 
B)$26,571 
C)$27,793 
D)$27,180

Quizplus · Accepted Answer

The flexible budget is based on the actual level of activity, which was 1,100 units. The food and supplies cost is $25 per unit, so the total cost for 1,100 units is $27,500. The fixed costs are $275, so the total cost for October is $27,775.

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