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:

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

The administrative expenses for May are calculated as 16% of the total expenses in the planning budget for May. The total expenses in the planning budget for May are $49,750, so the administrative expenses would be 16% of $49,750, which equals $7,960. Therefore, the closest answer choice is C, $7,960.

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