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

question 385

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 activity variance for administrative expenses in December would be closest to:

• A) $20 U
• B) $220 U
• C) $20 F
• D) $220 F

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Definitions:

Present Value

The calculated present value of future monetary sums or cash flow series, with a defined rate of return.

Invest

The process of investing funds or assets in a project with the aim of earning extra income or gains.

Simple Interest

Interest calculated only on the principal amount, or initial investment, not on the accumulated interest of previous periods.

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, so that the balance doesn't merely grow, it grows at an increasing rate.