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

question 79

Multiple Choice

Rhed 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 December, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,650 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
Actual results for December:
The wages and salaries in the planning budget for December would be closest to:

• A) $30,575
• B) $30,994
• C) $30,305
• D) $30,690

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Definitions:

Direct Labor Cost

The total cost of wages paid to workers directly involved in the manufacturing or production of goods or services.

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period, highlighting its profitability.

Unit Product Cost

The total cost associated with producing and delivering a single unit of product, including direct labor, materials, and overhead.

Absorption Costing

A financial approach that encompasses all production expenses, such as direct materials, direct labor, and all manufacturing overhead costs, both variable and fixed, into the product's price.