
Kawamura 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 December, the kennel budgeted for 2,300 tenant-days, but its actual level of activity was 2,320 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

 Fixed Element per MonthVariable element per tenant-dayRevenue

$ 0

$ 37.70

Wages and salaries

$ 3,000

$ 6.10

Food and supplies

800

13.40

Facility expenses

9,800

4.70

Administrative expenses

7,100

0.20

Total expenses

$ 20,700

$ 24.40

The wages and salaries in the planning budget for December would be closest to:

Multiple Choice

$17,787

$17,942

$17,152

$17,030

To calculate the wages and salaries in the planning budget for December, we need to use the following formula:

\[
\text{Wages and Salaries} = \text{Fixed Element} + (\text{Variable Element per tenant-day} \times \text{Budgeted tenant-days})
\]

We are provided the following values:
- **Fixed Element for Wages and Salaries**: \$3,000
- **Variable Element per tenant-day for Wages and Salaries**: \$6.10
- **Budgeted tenant-days**: 2,300

Substitute these values into the formula:

\[
\text{Wages and Salaries} = 3,000 + (6.10 \times 2,300)
\]

Now, let's calculate this step by step:

\[
6.10 \times 2,300 = 14,030
\]

\[
\text{Wages and Salaries} = 3,000 + 14,030 = 17,030
\]

So, the closest answer is:

\[
\boxed{17,030}
\]

Would you like more details or have any questions?

Here are 5 follow-up questions that might expand on this:
1. How would the budgeted wages change if the tenant-days were 2,500?
2. What would be the total expenses for the kennel based on the budgeted tenant-days?
3. How would the actual wages differ if the actual tenant-days were 2,500 instead of 2,320?
4. Can you calculate the total revenue for December based on the budgeted tenant-days?
5. What would happen to administrative expenses if the variable cost per tenant-day increased?

**Tip:** Always separate fixed and variable elements when calculating costs or revenues based on activity levels for accurate budgeting.

Kawamura 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 December, the kennel budgeted for 2,300 tenant-days, but its actual level of activity was 2,320 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

Fixed Element per MonthVariable element per tenant-dayRevenue
$0
$37.70
Wages and salaries
$3,000
$6.10
Food and supplies
800
13.40
Facility expenses
9,800
4.70
Administrative expenses
7,100
0.20
Total expenses
$20,700
$24.40
The wages and salaries in the planning budget for December would be closest to:

Multiple Choice
$17,787
$17,942
$17,152
$17,030

Learn how to calculate the wages and salaries in the planning budget for Kawamura Kennel, using a fixed element of $3,000 and a variable element of $6.10 per tenant-day. Budgeted tenant-days are 2,300. This step-by-step guide helps in mastering budgeting concepts with practical examples.

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