Kawamura Kennel uses tenant-days as its measure of activity, an animal housed in

Question

Kawamura 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 2,300 tenant-days, but its actual level of activity was 2,320 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting Fixe Variable Element element per per Month tenant-da Revenue $37.70 Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses $ 3,000 6.10 13.40 4.70 0.20 $20,700 %24.40 800 9,800 7,100 The administrative expenses in the planning budget for December would be closest to

Explanation / Answer

A.$7,560.

administrative expenses = fixed component + [$0.20* planned tenant days]

=>$7,100 + [$0.20*2,300 tenent days]

=>$7,100 + $460

=>$7,560.

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