Paulis Kennel uses tenant-days as its measure of activity; an animal housed in t
ID: 2521142 • Letter: P
Question
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 3,700 tenant-days, but its actual level of activity was 3,680 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 Variable element element per per month tenant-day Revenue $30.20 Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses 2,700 900 7,700 7,500 $18,800 $ 6.20 11.00 3.20 0.20 $20.60 Actual results for February:Explanation / Answer
Net operating income under Planning budget :
Revenue under planning budget = 3700*30.2 = 111740
Expense under planning budget = (3700*20.60+18800) = 95020
Net operating income under planning budget = 16720