Question

Dog 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 4,100 tenant-days, but its actual level of activity was 4,130 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 - $ 35.00 Wages and salaries $ 3,000 $ 8.00 Food and supplies 2,000 14.50 Facility expenses 8,500 3.50 Administrative expenses 7,000 0.50 Total expenses $ 20,500 $ 26.50 Actual results for March: Revenue $ 133,251 Wages and salaries $ 28,600 Food and supplies $ 62,225 Facility expenses $ 22,550 Administrative expenses $ 7,100 The revenue variance for March would be closest to:

Answer 1

Answer:

The revenue variance is $10,249

Explanation:

Dog Kennel budgets to have 4,100 tenant-days in March, and $35 is budgeted revenue for each tenant-day. So the revenue budgeted for March is $143,500.

Because the actual revenue in March is $133,251, then revenue variance is the difference between budget and actual, $10,249 = $143,500 - $133,251

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