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

question 299

Multiple Choice

Kari 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 3,200 tenant-days, but its actual level of activity was 3,230 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 spending variance for food and supplies in May would be closest to:

• A)$297 F
• B)$540 U
• C)$297 U
• D)$540 F

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Definitions:

Increase In Net Income

An upward movement in a company’s earnings after all expenses and taxes have been subtracted from total revenue.

Horizontal Analysis

An analytical technique in financial statement analysis where figures of line items are compared across multiple periods to identify trends and growth patterns.

Current Assets

Current Assets are all assets of a company that are expected to be sold, consumed, or converted into cash within one year or within the operating cycle of a business.

Long-Term Liabilities

Obligations expected to be paid more than one year in the future.