Legard 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 2,600 tenant-days, but its actual level of activity was 2,620 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January:
-The activity variance for wages and salaries in January would be closest to:
A) $158 F
B) $158 U
C) $102 U
D) $102 F

Question

Legard 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 2,600 tenant-days, but its actual level of activity was 2,620 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: 
-The activity variance for wages and salaries in January would be closest to:
A) $158 F 
B) $158 U 
C) $102 U 
D) $102 F

Quizplus · Accepted Answer

The formula for calculating activity variance is:

Activity Variance = (Actual Activity - Budgeted Activity) x Budgeted Rate

For wages and salaries, the budgeted rate is $12.50 per tenant-day (based on the budgeted wages and salaries of $32,500 and the budgeted tenant-days of 2,600).

So, the activity variance for wages and salaries in January would be:

(2,620 - 2,600) x $12.50 = $250 U

Therefore, the closest option is B) $158 U.

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