Dinham 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 March, the kennel budgeted for 4,500 tenant-days, but its actual level of activity was 4,560 tenant-days. The kennel h
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Dinham 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 March, the kennel budgeted for 4,500 tenant-days, but its actual level of activity was 4,560 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:
Data used in budgeting:
| Fixed element per month | Variable element per tenant-day | |
|---|---|---|
| Revenue | 0 | $ 35.00 |
| Wages and salaries | $ 3,400 | $ 8.40 |
| Food and supplies | 2,400 | 14.90 |
| Facility expenses | 8,900 | 3.90 |
| Administrative expenses | 7,400 | 0.30 |
| Total expenses | $ 22,100 | $ 27.50 |
Actual results for March:
| Revenue | $ 142,130 |
|---|---|
| Wages and salaries | $ 28,640 |
| Food and supplies | $ 71,025 |
| Facility expenses | $ 26,125 |
| Administrative expenses | $ 7,104 |
The spending variance for food and supplies in March would be closest to:
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