Kawamura 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 December, the kennel budgeted for 2,300 tenant-days, but its actual level of activity was 2,320 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 $37.70 Wages and salaries $ 3,000 $ 6.10 Food and supplies 800 13.40 Facility expenses 9,800 4.70 Administrative expenses 7,100 0.20 Total expenses $20,700 $24.40 The net operating income in the planning budget for December would be closest to: Multiple Choice A. $10,156 B. $9,890 C. $7,309 D. $7,184
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.
Kawamura 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 December, the kennel budgeted for 2,300 tenant-days, but its actual level of activity was 2,320 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 | $37.70 |
| Wages and salaries | $ 3,000 | $ 6.10 |
| Food and supplies | 800 | 13.40 |
| Facility expenses | 9,800 | 4.70 |
| Administrative expenses | 7,100 | 0.20 |
| Total expenses | $20,700 | $24.40 |
The net operating income in the planning budget for December would be closest to:
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