Tosta 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 May, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May:
-The net operating income in the planning budget for May would be closest to:
A) $9,140
B) $11,626
C) $12,200
D) $8,420

Question

Tosta 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 May, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: 
-The net operating income in the planning budget for May would be closest to:
A) $9,140 
B) $11,626 
C) $12,200 
D) $8,420

Quizplus · Accepted Answer

The net operating income in the planning budget for May would be closest to $9,140 because the net operating income is calculated by subtracting the total operating expenses from the total operating revenue. In this case, the total operating revenue is $21,266 and the total operating expenses are $12,126, so the net operating income is $21,266 - $12,126 = $9,140.

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