Question

TB MC Qu. 9-231 Dinham Kennel uses tenant-days ...

Dinham 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 March, the kennel budgeted for 3,600 tenant-days, but its actual level of activity was 3,630 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:

Data used in budgeting:

	Fixed element per month			Variable element per tenant-day
Revenue		-		$	34.50
Wages and salaries	$	2,500		$	7.50
Food and supplies		1,500			14.00
Facility expenses		8,000			3.00
Administrative expenses		6,500			0.60
Total expenses	$	18,500		$	25.10

Actual results for March:

Revenue	$	121,234
Wages and salaries	$	28,550
Food and supplies	$	53,125
Facility expenses	$	18,250
Administrative expenses	$	7,095

The spending variance for facility expenses in March would be closest to:

Answer 1

Spending variance = Actual - Flexible = 18,250 - [(3*3630)+8000] = 18,250 - 18,890 = 640 F
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