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 2,000 tenant-days, but its actual level of activity was 2,040 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-dayRevenue $35.40Wages and salaries$3,000 $6.60Food and supplies 400 12.20Facility expenses 9,600 2.30Administrative expenses 7,800 0.20Total expenses$20,800 $21.30?Actual results for March: Revenue$69,576 Wages and salaries$16,204 Food and supplies$25,008 Facility expenses$14,122 Administrative expenses$8,238 ?The
overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for March would be closest to:
A. $1,960 F
B. $1,396 U
C. $1,396 F
D. $1,960 U
Answer: D
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