Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per tenant-day Revenue $ 0 $ 30.80 Wages and salaries $ 3,300 $ 6.10 Food and supplies 600 10.10 Facility expenses 8,800 3.60 Administrative expenses 7,600 0.10 Total expenses $ 20,300 $ 19.90 The activity variance for wages and salaries in October would be closest to: Multiple Choice A. $298 U B. $122 F C. $298 F D. $122 U
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:
| Fixed element per month | Variable element per tenant-day | |
|---|---|---|
| Revenue | $ 0 | $ 30.80 |
| Wages and salaries | $ 3,300 | $ 6.10 |
| Food and supplies | 600 | 10.10 |
| Facility expenses | 8,800 | 3.60 |
| Administrative expenses | 7,600 | 0.10 |
| Total expenses | $ 20,300 | $ 19.90 |
The activity variance for wages and salaries in October would be closest to:
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