Knapper 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 January, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,740 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

-The net operating income in the flexible budget for January would be closest to:
A) $9,414
B) $8,350
C) $8,600
D) $8,970

Question

Knapper 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 January, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,740 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
 
-The net operating income in the flexible budget for January would be closest to:
A) $9,414 
B) $8,350 
C) $8,600 
D) $8,970

Quizplus · Accepted Answer

11ea7761_1754_8756_81a5_b7c722cee0e7_TB2580_00 Net operating income = ($11.10 × 2,740) − $21,000 = $9,414

Knapper Kennel Uses Tenant-Days as Its Measure of Activity; an Animal