Lutts 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 November, the kennel budgeted for 3,800 tenant-days, but its actual level of activity was 3,850 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 November would be closest to:
A) $7,310
B) $7,520
C) $7,540
D) $7,215

Question

Lutts 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 November, the kennel budgeted for 3,800 tenant-days, but its actual level of activity was 3,850 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 November would be closest to:
A) $7,310 
B) $7,520 
C) $7,540 
D) $7,215

Quizplus · Accepted Answer

The planning budget for administrative expenses is calculated based on the expected level of activity and fixed costs. The closest estimate provided is $7,520.

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