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

question 316

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 net operating income in the planning budget for May would be closest to:

• A) $3,905
• B) $3,883
• C) $8,844
• D) $8,920

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Definitions:

Equity Theory

A theory of motivation that focuses on the fairness of the distribution of rewards and resources within interpersonal relationships.

Distort

To twist or alter information or perception in a way that misrepresents the truth or reality.

Organizational Fairness

The perception of equitable treatment of employees within an organization, related to decisions, processes, and resource distribution.

Procedures

Established methods for conducting activities or tasks, often documented to ensure consistency and efficiency in operations.