Hamp 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 December, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,050 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
-The administrative expenses in the planning budget for December would be closest to:
A)$7,126
B)$7,245
C)$7,605
D)$7,600

Question

Hamp 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 December, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,050 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: 
-The administrative expenses in the planning budget for December would be closest to:
A)$7,126 
B)$7,245 
C)$7,605 
D)$7,600

Quizplus · Accepted Answer

Cost = Fixed cost per unit + Variable cost per unit F1F1F1S1F1F1F10 q
= $7,300 + $0.10 F1F1F1S1F1F1F10 3,000 = $7,600

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