Paulis 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 5,200 tenant-days, but its actual level of activity was 5,220 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for Februar Data used in budgeting:
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.
![Paulis 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 5,200 tenant-days, but its actual
level of activity was 5,220 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:
Fixed element per month
$0
$ 4,200
800
8,600
7,600
$ 21,200
Revenue
Wages and salaries
Food and supplies
Facility expenses
Administrative expenses
Total expenses
The static budget variance for net operating income in
February would be closest to:
$8,464 F
$126 F
$126 U
Variable element per tenant-day
$ 31.70
$ 7.70
12.50
4.70
0.50
$ 25.40
$8,464 U](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59b591fe-e810-41d1-80eb-ba2969a52669%2F5246fd46-455f-4639-a1c7-3f76f09ba50a%2Fp8edilk_processed.jpeg&w=3840&q=75)
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