Hello Please help with this question. Thank you Chirico Clinic uses client-visit

Question

Hello Please help with this question. Thank you Chirico Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,550 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Fixed element per month Variable element per client-visit Revenue $52.30 Personnel expenses $29,600 $15.50 Medical supplies 1,300 9.10 Occupancy expenses 8,200 2.50 Administrative expenses 6,000 0.40 Total expenses $45,100 $27.50 Actual results for February: Revenue $138,875 Personnel expenses $70,015 Medical supplies $24,335 Occupancy expenses $14,655 Administrative expenses $6,880

Required:

Determine the Personnel Expenses in the planning budget for February

Explanation / Answer

Budgeted client visits = 2550

Variable element per client visit for administrative expenses = $15.50

Therefore,

Total variable administrative expenses = $15.50 x 2550 = $39525

And,

Budgeted fixed administrative expenses per month = $37300

Thus,

Total administrative expenses in the planning budget for July = $39525 + $37300 = $76825

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