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 4,000 tenant-days, but its actual level of activity was 3,980 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: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses Actual results for February: Fixed Variable element element per per month tenant-day $30.50 $ 3,000 400 8,000 7,800 $19,200 $ 6.50 11.30 3.50 0.50 $21.80
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 4,000 tenant-days, but its actual level of activity was 3,980 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: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses Actual results for February: Fixed Variable element element per per month tenant-day $30.50 $ 3,000 400 8,000 7,800 $19,200 $ 6.50 11.30 3.50 0.50 $21.80
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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.
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Transcribed Image Text: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 4,000 tenant-days, but its actual level of activity was 3,980 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:
Revenue
Wages and salaries.
Food and supplies
Facility expenses
Administrative expenses
Total expenses
Actual results for February:
Fixed
element
per month
$ 3,000
400
8,000
7,800
$19,200
Variable
element per
tenant-day
$30.50
$ 6.50
11.30
3.50
0.50
$21.80
Transcribed Image Text:$107,780
$ 23,500
$36,790
$ 19,250
Administrative expenses $ 9,140
Revenue
Wages and salaries
Food and supplies
Facility expenses
The activity variance for net operating income in February would be closest to:
Multiple Choice
$3,500 F
$174 U
$174 F
$3,500 U
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