Smarter Shelter is a no-kill animal shelter located in Cincinnati, Ohio. Smarter

Question

Smarter Shelter is a no-kill animal shelter located in Cincinnati, Ohio. Smarter Shelter uses tenant-days as its measure of activity; an animal housed in the shelter for one day is counted as one tenant-day. During September, Smarter Shelter budgeted for 3,900 tenant-days, but its actual level of activity was 3,920 tenant-days. Smarter Shelter has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

$19,700

$25.70     

Actual results for September:

The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for September would be closest to:

$2,382 U

$2,564 F

$2,382 F

$2,564 U

Smarter Shelter is a no-kill animal shelter located in Cincinnati, Ohio. Smarter Shelter uses tenant-days as its measure of activity; an animal housed in the shelter for one day is counted as one tenant-day. During September, Smarter Shelter budgeted for 3,900 tenant-days, but its actual level of activity was 3,920 tenant-days. Smarter Shelter has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Explanation / Answer

Actual net operating income Revenue 128,321 less:expenses Wages and salaries -28,580 food and supplies -58,255 Facility expenses -20,980 Administrative expenses -7,098 Net operating income 13,408 Flexible budget revenue (3,920*34.80) 136416 less:Expenses Fixed expense -19,700 Variable expense (3,920*25.70) -100744 Net operating income 15972 Revenue and spending variance = 13408-15972 2,564 U answer

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