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

question 272

Multiple Choice

Fortmann 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 September, the kennel budgeted for 2, 000 tenant-days, but its actual level of activity was 2, 010 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: The activity variance for wages and salaries in September would be closest to:

• A)$595 U
• B)$595 F
• C)$75 U
• D)$75 F

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Definitions:

Cash Basis Accounting

An accounting method that records revenues and expenses when cash is actually received or paid, rather than at the time they are incurred.

Rental Payments

Periodic payments made by a lessee to a lessor for the use of a property, space, or equipment.

Landlord

An individual or entity that owns real estate which is rented or leased to another party, known as a tenant.

Prepaid Expense

Costs that have been paid in advance for goods or services to be received in the future, recognized as assets on the balance sheet until consumed.