Meinke 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 April, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April:Data used in budgeting: Actual results for April:
The food and supplies in the flexible budget for April would be closest to:
A) $54,280
B) $53,992
C) $52,265
D) $51,701

Question

Meinke 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 April, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April:Data used in budgeting:  Actual results for April:
 The food and supplies in the flexible budget for April would be closest to:
A) $54,280 
B) $53,992 
C) $52,265 
D) $51,701

Quizplus · Accepted Answer

The flexible budget formula for food and supplies is: $4.20 per tenant-day. 
The budgeted tenant-days were 3,700, so the flexible budget for food and supplies was $4.20 x 3,700 = $15,540. 
The actual tenant-days were 3,680, so the actual cost for food and supplies was $4.20 x 3,680 = $15,456. 
Therefore, the difference between the flexible budget and the actual cost is $15,540 - $15,456 = $84. 
The adjusted budget for food and supplies is $15,456 + $84 = $15,540. 
Therefore, the closest option is B) $53,992, which is closest to the adjusted budget of $15,540.

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