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 2,000 tenant-days, but its actual level of activity was 2,040 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:
Actual results for March:

-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:
A) $1,960 F
B) $1,960 U
C) $1,396 U
D) $1,396 F

Question

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 2,000 tenant-days, but its actual level of activity was 2,040 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:
  Actual results for March:
 
-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:
A) $1,960 F 
B) $1,960 U 
C) $1,396 U 
D) $1,396 F

Quizplus · Accepted Answer

11ea7761_1787_7e49_81a5_c9f73cc0d2b2_TB2580_00 11ea7761_1787_7e4a_81a5_35c92de9ac14_TB2580_00 Because the actual net operating income is less than the flexible budget, the variance is unfavorable (U).

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