Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

-The activity variance for net operating income in October would be closest to:
A) $2,328 F
B) $218 U
C) $218 F
D) $2,328 U

Question

Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
 
-The activity variance for net operating income in October would be closest to:
A) $2,328 F 
B) $218 U 
C) $218 F 
D) $2,328 U

Quizplus · Accepted Answer

11ea7761_1779_7433_81a5_b18c2f3c61bf_TB2580_00 Because the flexible budget net operating income is greater than the planning budget, the variance is favorable (F).

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