#21 Ben Casey Clinic uses client-visits as its measure of activity. During Octob

Question

#21

Ben Casey Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 2,290 client-visits, but its actual level of activity was 2,320 client-visits. Ben Casey Clinic has provided the following data concerning the formulas to be used in its budgeting:

Fixed element per month

Variable element per client-visit

  Revenue

      0        

$70.20            

  Personnel expenses

$40,500        

$24.60            

  Medical supplies

1,750        

10.30            

  Occupancy expenses

9,730        

2.80            

  Administrative expenses

6,670        

.30            

  Total expenses

$58,650        

$38.00            

The activity variance for administrative expenses in October would be closest to:

a. $9 U

b. $309 F

c. $309 U

d. $9 F

#21

Ben Casey Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 2,290 client-visits, but its actual level of activity was 2,320 client-visits. Ben Casey Clinic has provided the following data concerning the formulas to be used in its budgeting:

Explanation / Answer

Budgeted Administrative expenses = 2290* 0.30

= $687

Actual Administrative expenses = 2320 * 0.30

= $696

The activity variance for administrative expenses in October = Actual Administrative expenses

- Budgeted Administrative expenses

= $696 - $687

= $9F (option d)

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