# Roye Kennel: calculate spending variance in a month

Question

Roye 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 September, Kennel budgeted for 4,800 tenant-days, but its actual level of activity was 4,820 tenant-days. Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

 Fixed element per month Variable element per tenant-day Revenue — \$35.30 Wages and salaries \$2,000 \$8.70 Expendables 1,200 15.20 Facility expenses 7,600 4.20 Administrative expenses 7,700 0.60 Total expenses \$18,500 \$28.70

Actual results for September:

 Revenue \$145,135

 Wages and salaries \$28,670 Expendables \$75,065 Facility expenses \$27,230 Administrative expenses \$7,107

The spending variance for expendables in September would be closest to:

1. \$905 U
2. \$905 F
3. \$601 U
4. \$601 F

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