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 4,600 tenant-days, but its actual level of activity was 4,580 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:
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 4,600 tenant-days, but its actual level of activity was 4,580 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 | Variable element per tenant-day | |
|---|---|---|
| Revenue | $ 0 | $ 31.10 |
| Wages and salaries | $ 3,600 | $ 7.10 |
| Food and supplies | 200 | 11.90 |
| Facility expenses | 8,600 | 4.10 |
| Administrative expenses | 8,400 | 0.50 |
| Total expenses | $ 20,800 | $ 23.60 |
Actual results for February:
| Revenue | $ 108,380 |
|---|---|
| Wages and salaries | $ 23,560 |
| Food and supplies | $ 36,796 |
| Facility expenses | $ 19,310 |
| Administrative expenses | $ 9,152 |
The net operating income in the flexible budget for February would be closest to:
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