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

question 311

Multiple Choice

Wales 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 2,700 tenant-days, but its actual level of activity was 2,730 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The net operating income in the planning budget for February would be closest to:

• A)$9,100
• B)$12,123
• C)$8,800
• D)$11,858

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Definitions:

Dollar-Value LIFO

Dollar-value LIFO (Last In, First Out) is an accounting method used for inventory that measures the cost of inventory in dollar terms, adjusting for inflation.

Cost Index

An index that measures the changes in the cost or price of specific goods or services over time.

FIFO Cost

FIFO, or First-In, First-Out, is an inventory valuation method where the costs of the earliest goods purchased or produced are the first to be recognized in determining cost of goods sold.

Dollar-Value LIFO

An inventory valuation method under Last-In, First-Out principle, adjusting for changes in price level or inflation, allowing for a more accurate financial analysis over time.