Nicolini Kennel uses tenantdays as its measure of activity a

Nicolini 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 October, the kennel budge 2,250 tenant-days, but its actual level of activity was 2,300 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and results for October Data used in budgeting: Variable element per Fixed element per month tenant-day Revenue Wages and salaries Food and supplies Facillity expenses Administrative expenses Total expenses -37.90 $3,180 7.90 12.90 3.70 0.70 $ 24,700 25.20 1,420 10,860 9,240 Actual results for October Revenue Wages and salarles Food and supplies Facility expenses Administrative expenses $83,840 $20,375 $30,465 $ 20,075 $10,785 The administrative expenses in the planning budget for October would be closest to O $10,611 O $10,785 $10,825

Solution

Administrative Expense in the Planning Budget = Fixed Component + Variable Component

= $ 9,240 + ( 2250 days * $ 0.70)

= $ 10,815

Hence, the correct answer is $ 10,815