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

question 200

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 4,050 tenant-days, but its actual level of activity was 4,000 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 activity variance for administrative expenses in December would be closest to:

• A) $15 U
• B) $250 U
• C) $15 F
• D) $250 F

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Definitions:

Sale On Account

A transaction where goods are sold and payment is to be made at a later date.

Equity

The value of an owner's interest in a company, calculated as the difference between the company's assets and liabilities.

Assets

Economic resources owned or controlled by a business or individual that are expected to bring future benefits.

Liabilities

Financial obligations or debts a company owes to others that must be paid in the future.