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

question 73

Multiple Choice

Nicolini 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 October, the kennel budgeted for 2,200 tenant-days, but its actual level of activity was 2,250 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: Actual results for October: The spending variance for food and supplies in October would be closest to:

• A)$600 F
• B)$5 F
• C)$600 U
• D)$5 U

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Definitions:

Value Analysis

A systematic approach to assess the function of goods or services with the goal of reducing cost while maintaining or improving quality and performance.

Purchase Item

Refers to any good or service that is acquired by an individual or organization through buying.

Function

The specific purpose or role that an entity or a process serves within a larger system or organization.

Cost

The amount of money required to purchase something or the expense associated with creating or maintaining a service or product.