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 3,500 tenant-days, but its actual level of activity was 3,550 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 - $ 34.40 Wages and salaries $ 2,400 $ 7.40 Food and supplies 1,400 13.90 Facility expenses 7,900 2.90 Administrative expenses 6,400 0.50 Total expenses $ 18,100 $ 24.70 Actual results for March: Revenue $ 119,125 Wages and salaries $ 28,540 Food and supplies $ 51,125 Facility expenses $ 17,250 Administrative expenses $ 7,094 The spending variance for facility expenses in March would be closest to

Dinham Kennel

The spending variance for facility expenses in March would be closest to:

$945.

Explanation:

a) Data and Calculations:

Budgeted kennel tenant-days = 3,500

Actual kennel tenant-days = 3,550

Variance = 50 tenant-days (3,550 - 3,500) Favorable

Data used in budgeting:

                                    Fixed element     Variable element

                                       per month           per tenant-day

Revenue                                -                              $ 34.40

Wages and salaries          $ 2,400                        $ 7.40

Food and supplies                1,400                          13.90

Facility expenses                 7,900                           2.90

Administrative expenses    6,400                           0.50

Total expenses                $ 18,100                      $ 24.70

Actual results for March:

Revenue                          $ 119,125

Wages and salaries        $ 28,540

Food and supplies           $ 51,125

Facility expenses            $ 17,250

Administrative expenses $ 7,094

The spending variance for facility expenses in March:

Actual facility expenses         =  $17,250

less Budgeted facility expenses 18,195 ($7,900 +$ 2.90 * 3,550)

Spending variance =                     $945

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