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

question 71

Multiple Choice

Paulis 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 February, the kennel budgeted for 2,500 tenant-days, but its actual level of activity was 2,480 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:
Actual results for February:
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 February would be closest to:

• A) $500 F
• B) $500 U
• C) $264 F
• D) $264 U

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Definitions:

Secondary Effects

The unintended consequences of economic actions, which can occur as indirect results of a policy or event.

Economic Actions

Decisions or behaviors taken by individuals, firms, or governments that affect the production, distribution, and consumption of goods and services.

Positive Economic Statement

An objective statement about the economy that can be tested and validated through observation.

Government Control

The involvement or intervention by governmental bodies in regulating or directing economic activities, market practices, and industry standards.