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

question 292

Multiple Choice

Goodfriend 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 June, the kennel budgeted for 2,800 tenant-days, but its actual level of activity was 2,840 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for June:

Data used in budgeting: Actual results for June:
-The wages and salaries in the planning budget for June would be closest to:

• A)$22,214
• B)$21,901
• C)$22,180
• D)$22,464

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Definitions:

Return on Investment

A measure of the financial gain or loss on an investment relative to the amount of money invested.

Operating Assets

Assets used by an organization in its day-to-day operations to generate revenue, excluding investments and inventory.

Residual Income

The amount of net income an entity has after deducting all necessary expenses and required returns on investments, representing leftover earnings.

Operations

The activities involved in the day-to-day functions of a business related to producing and delivering its products or services.