Question 30 Keisker Clinic uses client-visits as its measure of activity. During

Question

Question 30

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:

Actual results for November:

The spending variance for occupancy expenses in November would be closest to:

$530 U

$510 F

$510 U

$530 F

Fixed element per month Variable element per client-visit Revenue - $ 54.10 Personnel expenses $ 29,200 $ 17.50 Medical supplies 700 8.70 Occupancy expenses 7,100 2.00 Administrative expenses 4,800 0.10 Total expenses $ 41,800 $ 28.30

Explanation / Answer

Flexible budget expense for occupancy expenses = 7100+(2190*2)= 11480 Spending variance for occupancy expenses = 11480-10970 = 510F Option 2 is correct

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