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Marsee 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 2,500 tenant-days, but its actual level of activity was 2,510 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 activity variance for administrative expenses in June would be closest to:
Economies of Scale
A situation where the cost of producing one unit of a good decreases as the volume of production increases.
Diseconomies of Scale
The phenomenon where, beyond a certain point, the cost per unit increases as a company continues to grow in size and output.
Per-Unit Cost
The average cost for each product produced, calculated by dividing the total production costs by the total units produced.
Output
The total quantity of goods or services produced by a firm, sector, or economy within a certain period of time.
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