Samaritan Clinic (a rural, nonprofit community medical facility) bases its budge
ID: 2524926 • Letter: S
Question
Samaritan Clinic (a rural, nonprofit community medical facility) bases its budgets on the activity measure patient-visits. During November, the clinic planned for an activity level of 36,000 patient-visits, but actually reached 39,000 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:
Revenue: $2.50q
Wages and salaries: $21,500 + $0.70q
Supplies: $0.40q
Insurance: $6,100
Miscellaneous: $3,700 + $0.40q
The Clinic reported the following actual results for November:
How much of the total wages and salaries variance for the month of November is due to activity variance and how much is due to cost control (spending variance)?
Revenue $100,300 Wages and salaries $45,900 Supplies $15,200 Insurance $6,300 Miscellaneous $17,600Explanation / Answer
Total wages and salary variance = (36000*0.70+21500)-45900 = 800 F
Activity variance = (36000-39000)*0.70 = 2100 U
spending variance = (39000*.70+21500-45900) = 2900 F
so answer is d) $2100 U ; $2900 F
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.