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managerial accounting help?

2 Answers

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  • 6 years ago

    Foxworthy 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 July, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

    Fixed Element per month variable element per tenant-day

    revenue……………. ----- $32.90

    wages and salaries……………… $2,900 $7.40

    expendables…………………. 400 9.70

    facility expenses…………. 9100 2.50

    administrative expenses………. 7400 0.40

    total expenses…………. $19,800 $20.00

    The administrative expenses in the planning budget for July would be closest to:

    $8,220

    $8,200

    $8,300

    $8,098

    could you please explain how you got your answer thanks !

  • Prof
    Lv 7
    6 years ago

    Actual $7,400 + 2,050 x .40 = $8,220

    Planned: $7,400 + 2,000 x.40 = $8,200

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