Question: Smithi 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 3,610 tenant days, but its actual level of activity was 3,600 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: Revenue Wages and salaries Food and supplies Facility expenses Fixed element per month Variable element per tenant day $ 33.30 $2,125 $6.20 Administrative Total expenses Actual results for February: Revenue $ 1,18,985 Wages and salaries $ 24,013 Food and supplies $ 43,150 Facility expenses $ 33,481 Administrative expenses $ 13,295 $ 1,190 $9,250 $11.30 $ 6.90 $ 7,990 $ 20,555 $ 1.50 $25.90 The spending variance for food and supplies in February would be closest to: A. $1,280 F B. $1,280 U C. $1,204 F D. $895 U The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the: a. Production variance. b. Quantity variance. c. Volume variance. d. Price variance. e. Controllable variance.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 1PB
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Question:
Smithi 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 3,610 tenant days, but its actual level
of activity was 3,600 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:
Revenue
Wages and salaries
Food and supplies
Facility expenses
Fixed element per
month
Variable element per tenant
day
$ 33.30
$2,125
$6.20
Administrative
Total expenses
Actual results for February:
Revenue
$ 1,18,985
Wages and salaries
$ 24,013
Food and supplies
$ 43,150
Facility expenses
$ 33,481
Administrative expenses
$ 13,295
$ 1,190
$9,250
$11.30
$ 6.90
$ 7,990
$ 20,555
$ 1.50
$25.90
The spending variance for food and supplies in February would be
closest to:
A. $1,280 F
B. $1,280 U
C. $1,204 F
D. $895 U
The sum of the variable overhead spending variance, the variable
overhead efficiency variance, and the fixed overhead spending variance
is the:
a. Production variance.
b. Quantity variance.
c. Volume variance.
d. Price variance.
e. Controllable variance.
Transcribed Image Text:Question: Smithi 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 3,610 tenant days, but its actual level of activity was 3,600 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: Revenue Wages and salaries Food and supplies Facility expenses Fixed element per month Variable element per tenant day $ 33.30 $2,125 $6.20 Administrative Total expenses Actual results for February: Revenue $ 1,18,985 Wages and salaries $ 24,013 Food and supplies $ 43,150 Facility expenses $ 33,481 Administrative expenses $ 13,295 $ 1,190 $9,250 $11.30 $ 6.90 $ 7,990 $ 20,555 $ 1.50 $25.90 The spending variance for food and supplies in February would be closest to: A. $1,280 F B. $1,280 U C. $1,204 F D. $895 U The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the: a. Production variance. b. Quantity variance. c. Volume variance. d. Price variance. e. Controllable variance.
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