Question

Dinham 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 4,600 tenant-days, but its actual level of activity was 4,670 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		-		$	35.10
Wages and salaries	$	3,500		$	8.50
Food and supplies		1,000			15.00
Facility expenses		9,000			4.00
Administrative expenses		7,500			0.40
Total expenses	$	21,000		$	27.90

Actual results for March:

Revenue	$	143,330
Wages and salaries	$	28,650
Food and supplies	$	71,345
Facility expenses	$	27,130
Administrative expenses	$	7,105

The spending variance for food and supplies in March would be closest to:

Multiple Choice

• $1,345 F

• $1,345 U

• $295 F

• $295 U

Answer 1