Smithj 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 February,the kennel budgeted for 3,500 tenant-days,but its actual level of activity was 3,490 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: The revenue variance for February would be closest to:

Question

Smithj 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 February,the kennel budgeted for 3,500 tenant-days,but its actual level of activity was 3,490 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:  Actual results for February:  The revenue variance for February would be closest to:

Quizplus · Accepted Answer

Revenue variance = (Actual tenant-days x Actual price) - (Budgeted tenant-days x Budgeted price)

Actual price = Actual revenue / Actual tenant-days = $30,285 / 3,490 = $8.68

Budgeted price = Budgeted revenue / Budgeted tenant-days = $31,360 / 3,500 = $8.96

Revenue variance = (3,490 x 8.68) - (3,500 x 8.96) = $640 U

Therefore, the answer is (C) $640 U.

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