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

question 147

Multiple Choice

Dinham 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 March, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting:
Actual results for March:
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for March would be closest to:

• A) $1,960 F
• B) $1,960 U
• C) $1,396 U
• D) $1,396 F

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Definitions:

"Buy One, Get One Free"

A promotional sales technique where customers are offered an additional product at no extra cost upon purchasing the first item.

Monopolistic Competition

A market structure characterized by many sellers offering similar but not identical products, leading to competition based on product differentiation.

Purely Competitive Market

A market structure characterized by a large number of sellers offering identical products, with no single seller able to control the market price.

Product Differentiation

The process of distinguishing a product or service from others, to make it more attractive to a particular target market.