Asked by jeremiah coleman on Jul 25, 2024
Verified
Meinke 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 April, 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 April:Data used in budgeting: Actual results for April:
The food and supplies in the flexible budget for April would be closest to:
A) $54,280
B) $53,992
C) $52,265
D) $51,701
Tenant-Days
Tenant-days represent a metric used in real estate management to calculate the total number of days a property is occupied by tenants over a specific period.
Food and Supplies
Items that are consumed or used in the process of feeding individuals and supporting operations, often accounted for in budgeting for institutions like schools and hospitals.
Flexible Budget
A budget that adjusts or changes according to the volume of output or the level of activity achieved.
- Gauge and delineate net operating income according to flexible and planning budgets.
Verified Answer
The budgeted tenant-days were 3,700, so the flexible budget for food and supplies was $4.20 x 3,700 = $15,540.
The actual tenant-days were 3,680, so the actual cost for food and supplies was $4.20 x 3,680 = $15,456.
Therefore, the difference between the flexible budget and the actual cost is $15,540 - $15,456 = $84.
The adjusted budget for food and supplies is $15,456 + $84 = $15,540.
Therefore, the closest option is B) $53,992, which is closest to the adjusted budget of $15,540.
Learning Objectives
- Gauge and delineate net operating income according to flexible and planning budgets.
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