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

Question

Gandrud 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 June, the kennel budgeted for 2,600 tenant-days, but its actual level of activity was 2,580 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per tenant-day Revenue $37.10 Wages and salaries $3,400 $7.30 Food and supplies 1,200 14.00 Facility expenses 9,600 2.60 Administrative expenses 7,700 0.30 Total expenses $21,900 $24.20 The food and supplies in the flexible budget for June would be closest to: $36,993 $37,569 $37,600 $37,320

Explanation / Answer

Calculate food and supplies in flexible budget :

Flexible budget (Food and supplies) = (2580*14)+1200 = $37320

so asnwer is d) $37320

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