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 5,200 tenant-days, but its actual level of activity was 5,230 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 monthVariable element per tenant-dayRevenue0$ 35.70Wages and salaries$ 2,400$ 9.10Food and supplies1,60015.60Facility expenses8,0004.60Administrative expenses6,5000.40Total expenses$ 18,500$ 29.70 Actual results for March: Revenue$ 171,323Wages and salaries$ 28,710Food and supplies$ 82,980Facility expenses$ 32,258Administrative expenses$ 7,111 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 March would be closest to:

Total cost of production of a good comprises of the total fixed cost of production and the total…

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...

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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 5,200 tenant-days, but its actual level of activity was 5,230 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	$ 35.70
Wages and salaries	$ 2,400	$ 9.10
Food and supplies	1,600	15.60
Facility expenses	8,000	4.60
Administrative expenses	6,500	0.40
Total expenses	$ 18,500	$ 29.70

Actual results for March:

Revenue	$ 171,323
Wages and salaries	$ 28,710
Food and supplies	$ 82,980
Facility expenses	$ 32,258
Administrative expenses	$ 7,111

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 March would be closest to:

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