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

question 65

Multiple Choice

Virgen 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 3,700 tenant-days, but its actual level of activity was 3,690 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 wages and salaries in the planning budget for May would be closest to:

• A) $25,070
• B) $25,009
• C) $23,919
• D) $23,984

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Definitions:

Financing Cash Flow

Cash flow that is related to the financing of a company's operations, including debt, equity, and dividends.

Common Stock

A form of financial security that denotes part ownership in a company and entails a stake in the company's earnings or deficits.

Separate Entity Assumption

An accounting principle that treats a company as an independent entity separate from its owners for reporting purposes.