Whetstine 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 September, the kennel budgeted for 3,200 tenant-days, but its actual level of activity was 3,180 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
-The expendables in the flexible budget for September would be closest to:
A) $27,630
B) $27,864
C) $27,517
D) $27,800

Question

Whetstine 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 September, the kennel budgeted for 3,200 tenant-days, but its actual level of activity was 3,180 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: 
-The expendables in the flexible budget for September would be closest to:
A) $27,630 
B) $27,864 
C) $27,517 
D) $27,800

Quizplus · Accepted Answer

The expendables in the flexible budget for September would be closest to $27,630 because the flexible budget is based on the actual level of activity, and the actual level of activity for September was 1,200 units. The variable cost per unit is $23, so the total variable cost for 1,200 units is $27,600. The fixed costs are $1,030, so the total expendables for September would be $27,630.

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