Clore 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 2,900 tenant-days, but its actual level of activity was 2,920 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 activity variance for administrative expenses in March would be closest to:
A)$212 F
B)$8 U
C)$212 U
D)$8 F

Question

Clore 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 2,900 tenant-days, but its actual level of activity was 2,920 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 activity variance for administrative expenses in March would be closest to:

Data used in budgeting:
 Actual results for March: 
-The activity variance for administrative expenses in March would be closest to:
A)$212 F 
B)$8 U 
C)$212 U 
D)$8 F

Quizplus · Accepted Answer

The activity variance is calculated as the difference between the actual activity level and the budgeted activity level, multiplied by the standard rate. In this case, the actual activity level is 1,000 hours, the budgeted activity level is 992 hours, and the standard rate is $8 per hour. Therefore, the activity variance is (1,000 - 992) * $8 = $8.

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