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

question 59

Multiple Choice

Galante 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 May, the kennel budgeted for 3,400 tenant-days, but its actual level of activity was 3,380 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:
Actual results for May:
-The overall revenue and spending variance (i.e. ,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for May would be closest to:

• A)$5,890 F
• B)$5,890 U
• C)$5,720 U
• D)$5,720 F

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Definitions:

Effective Interest Method

A technique used for calculating the interest income of a debt investment over its expected life, adjusting for the impact of amortizing any discount or premium on the purchase price of the bond.

Journal Entry

A record of the financial transactions of a business, documented in the general ledger accounts.

Issuance

Issuance refers to the process of making securities available for sale by a corporation or government entity, typically in the context of raising capital.

Interest Payment

A payment made to lenders by borrowers, representing the interest accrued on the loan or debt for a specific period.