Virgen 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 May, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,690 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Fixed Element per Month Variable element per tenant-day
Revenue - $ 26.40
Wages and salaries $ 2,500 $ 6.10
Food and supplies 1,300 9.70
Facility expenses 8,600 2.60
Administrative expenses 6,800 0.40
Total expenses $ 19,200 $ 18.80
Actual results for May:

Revenue $ 92,626
Wages and salaries $ 23,919
Food and supplies $ 37,833
Facility expenses $ 18,594
Administrative expenses $ 8,386
The administrative expenses in the planning budget for May would be closest to:

Multiple Choice

$8,386

$8,409

$8,280

$8,276

Budgeted Administrative expenses (which are that type of expenses a company incurs that are not directly attached to a particular function such as production, manufacturing, or sales. They are also the type of expenses associated to the company as a whole in contrast to an individual department or business unit.)

= fixed element + variable element

= $6,800 + 3,700 x $.40

= $8,280

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