Nicolini Kennel uses tenant-days as its measure of activity; an animal housed in

Question

Nicolini 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 October, the kennel budgeted for 2,250 tenant- days, but its actual level of activity was 2,300 tenant-days. The kennel has provided the following data concening the formulas used in its budgeting and its actual results for October: Data used in budgeting Fixed Variable element per element per monthtenant-day Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses -37.90 $ 3,180 $7.90 12.90 3.70 0.70 $ 24,700 25.20 1,420 10,860 9,240 Actual results for October Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses $ 83,840 $ 20,375 $30,465 $ 20,075 10,785 The administrative expenses in the planning budget for October would be closest to: O $10,611 $10,785 O $10,825 O $10,815

Explanation / Answer

Calculate administrative expense in the planning budget :

Administrative expense = (2250*.70+9240) = 10815

So answer is d) $10815

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