Leaphart 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 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 to be used in its budgeting:
-The net operating income in the planning budget for May would be closest to:
Definitions:
Periodic Inventory System
An accounting method where inventory values and cost of goods sold are determined at the end of an accounting period.
Merchandise Inventory
refers to the goods available for sale to customers in the retail and wholesale industries.
Cost of Merchandise Sold
The total expense incurred by a business to sell goods over a period, including the cost of acquiring or manufacturing those goods.
Account Form
The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and Liabilities and Owner’s Equity sections on the right side.
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