Bartosiewicz Clinic uses client-visits as its measure of activity. During Januar

Question

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,680 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting Fixed Variable element element per per month client-visit Revenue $35.70 Personnel expenses Medical supplies Occupancy expenses Administrative expenses Total expenses $27,700 1,700 10,700 6,700 $46,800 $11.70 5.70 1.00 0.30 $18.70 Actual results for January:

Explanation / Answer

Actual net operating income=124720-72070-22714-14670-8175= $7091 Net operating income in flexible budget=3680*(35.70-18.70)-46800= $15760 Overall revenue and spending variance=15760-7091 = $8669 U Option 3 is correct

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