1. KAY CLINIC uses patient-visits as its measure of activity. During April, the
ID: 2552859 • Letter: 1
Question
1. KAY CLINIC uses patient-visits as its measure of activity. During April, the clinic budgeted for 3,800 patient-visits, but its actual level of activity was 3,400 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:
Revenue: $39.70q
Personnel expenses: $38,700 + $11.50q
Medical supplies: $1,000 + $7.30q
Occupancy expenses: $11,700 + $1.30q
Administrative expenses: $6,700 + $0.30q
The clinic reported the following actual results for April:
Required: Prepare a report showing the clinic's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).
$132,280 Revenue Personnel expenses Medical supplies Occupancy expenses. Administrative expenses. $26,300 $16,210 $7,620Explanation / Answer
Variance Report Actual Flexible Variance Activity 3400 3400 Revenue 132280 134980 [3400*39.70] 2700 U expense Personnel expenses 76500 77800 [38700+(11.5*3400)] -1300 F Medical supplies 26300 25820 [1000+(7.3*3400)] 480 U Occupancy expenses 16210 16120 [11700+(1.3*3400)] 90 U Administrative expenses 7620 7720 [6700+(.3*3400)] -100 F Total expense 126630 127460 -830 F Net operating income 5650 7520 1870 U
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.