Question

Malander 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 November, the kennel budgeted for 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November:

Data used in budgeting:

	Fixed element per month			Variable element per tenant-day
Revenue		-		$	28.00
Wages and salaries	$	2,700		$	5.40
Food and supplies		500			10.20
Facility expenses		9,600			3.30
Administrative expenses		6,600			0.20
Total expenses	$	19,400		$	19.10

Actual results for November:

Revenue	$	90,470
Wages and salaries	$	20,606
Food and supplies	$	35,838
Facility expenses	$	20,857
Administrative expenses	$	7,518

The activity variance for wages and salaries in November would be closest to:

Multiple Choice

• $454 F

• $454 U

• $54 F

• $54 U

Answer 1

Activity variance

= Budgeted - Flexible

= [2700+(5.40*3400)] + [2700+(5.40*3390)]

= 21,060 - 21,006

= 54 F