Galante Kennel: calculate variance in a month

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Question

Galante 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 May, Kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:

	Fixed element per month	Variable element per tenant-day
Revenue	—	$30.20

Wages and salaries	$2,700	$6.20
Expendables	900	11.00
Facility expenses	7,700	3.20
Administrative expenses	7,500	0.20
Total expenses	$18,800	$20.60

Actual results for May:

Revenue	$107,480

Wages and salaries	$23,470
Expendables	$36,787
Facility expenses	$19,220
Administrative expenses	$9,134

The activity variance for net operating income in May would be closest to:

a. $2,149 U

b. $192 U

c. $192 F

d. $2,149 F

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