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

question 39

Multiple Choice

Smithj 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 February, the kennel budgeted for 3,500 tenant-days, but its actual level of activity was 3,490 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

Data used in budgeting:

Actual results for February:

-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 February would be closest to:

• A)$1,055 U
• B)$970 U
• C)$970 F
• D)$1,055 F

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Definitions:

Empirical Evidence

Information acquired by observation or experimentation that is used to confirm or refute a hypothesis or theory.

Evaluating Facts

The process of assessing the accuracy and relevance of information to determine truth.

Objective

Based on facts rather than feelings or opinions; not influenced by personal feelings or interpretations.

Syllogistic Steps

Logical sequences involved in the process of syllogism, a form of reasoning where a conclusion is drawn from two given or presumed propositions (premises) that share a common term.