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

Question

Nicolini Kennel uses tenant-days as its measure of activity; en animal housed in the kennel for one day is counted as one tenant-day. During October, the kennel budgeted for 2,200 tenant-days, but its ectuel level of activity was 2,250 tenant-deys. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for October Data used in budgeting Fixed element per montlh Variable element per tenant-day Revenue... $35.40 Wages and salaries. Food and supplies Facility expenses Administrative expenses.... $2,900 1,000 8,800 7.40 11.90 2.70 0 20 $22 20 $20.100 Actual results for October Wages and salaries . . . Food and supplies Facility expenses Administrative expenses $18,600 $27.175 $15,555 $7,810 The administrative expenses in the planning budget for October would be closest to: O $7636 O $7810 O s7,a50 O $7,840

Explanation / Answer

Administrative expenses in the planning budget = 7400+(2200*0.2)= $7840 Option 4 is correct

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