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

question 103

Multiple Choice

Pearse 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 2,980 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

Actual results for December:

-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 December would be closest to:

• A)$640 F
• B)$840 F
• C)$640 U
• D)$840 U

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Definitions:

Enforce

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Incidental Beneficiary

A person who gains a benefit from a contract between two other parties, but whose benefit was not the reason the contract was created.

Wage Earner's Assignment

A legal agreement allowing for the voluntary deduction of money from an employee's wages to pay off debts.

Statutes

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