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

question 108

Multiple Choice

Stent 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 3,000 tenant-days, but its actual level of activity was 2,950 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:
-The facility expenses in the flexible budget for February would be closest to:

• A) $16,000
• B) $15,875
• C) $15,738
• D) $16,276

---

Definitions:

Departmental Overhead Rates

Costs associated with a department's operations that are distributed across products or services, often based on a predetermined rate.

Machine Hours

A measure used in costing to allocate costs based on the number of hours a machine is operated.

Direct Labor Hours

A measure of the total hours worked directly on producing goods, typically used in manufacturing and cost accounting.

Departmental Overhead Rate

A method used to allocate indirect costs to specific departments based on their respective activities or usage.