Glassing Clinic uses client-visits as its measure of activity. During September,

Question

Glassing Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 3,950 client-visits, but its actual level of activity was 3,910 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:

The activity variance for personnel expenses in September would be closest to:

a. $268 F

b. $736 U

c. $268 U

d. $736 F

Fixed element per month Variable element per client-visit Revenue $ 29.10 Personnel expenses $ 24,500 $ 6.70 Medical supplies 1,920 6.50 Occupancy expenses 4,275 4.10 Administrative expenses 3,180 2.10 Total expenses $ 33,875 $ 19.40

Explanation / Answer

Planning budget (($6.70*3,950)+$24,500) $ 50,965 Flexible budget (($6.70*3,910) + $24,500) $ 50,697 Activity variance $268 F

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