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

question 170

Multiple Choice

Hamp 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 December, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,050 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
-The expendables in the flexible budget for December would be closest to:

• A)$35,900
• B)$34,466
• C)$36,490
• D)$35,624

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Definitions:

Management Estimates

Judgments and assumptions made by a company's management for reporting financial figures, when a precise value cannot be determined.

Estimated Inventory Returns

An approximation of the amount of inventory that is expected to be returned by customers over a specified period.

Normal Account Balances

The typical or expected balance of an account based on its classification in accounting, such as debit for assets and credit for liabilities.

Refund Liability

An obligation recorded on the company's balance sheet, representing the expected refunds to customers for returns or dissatisfaction over a period.