Perla 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 March,the kennel budgeted for 2,200 tenant-days,but its actual level of activity was 2,160 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The revenue variance for March would be closest to:

Question

Perla 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 March,the kennel budgeted for 2,200 tenant-days,but its actual level of activity was 2,160 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting:  Actual results for March:  The revenue variance for March would be closest to:

Quizplus · Accepted Answer

Revenue variance = Actual revenue - Budgeted revenue

Actual revenue = Actual tenant-days * Actual price per tenant-day 
               = 2,160 * $12 = $25,920

Budgeted revenue = Budgeted tenant-days * Budgeted price per tenant-day 
                   = 2,200 * $12 = $26,400

Revenue variance = $25,920 - $26,400 = -$480

Since the actual revenue is lower than the budgeted revenue, the variance is unfavorable or unfavorable. Therefore, the revenue variance for March is $420 U (Option C).

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