Keisker Clinic uses client-visits as its measure of activity. During November, t

Question

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: Fixed element per Variable element por cliont-vinit month Revenue $54.10 Personnel expenses Medical supplies Occupancy expenses Administrative expenses Total expenses 29,200 700 7,100 4,800 $41,800 $17.50 8.70 2.00 0.10 $28.30 Actual results for November Personnel expenses Medical aupplien Occupancy expenses Administrative expenses $120,989 66,265 19,223 10,970 S 5,059 The activity variance for administrative expenses in November would be closest to: $1 F $39 F $39 U $1 U

Explanation / Answer

Administrative expenses in planning budget=4800+(2200*0.1)= 5020 Administrative expenses in flexible budget=4800+(2190*0.1)= 5019 Activity variance for administrative expenses=5020-5019 = $1F Option 1 is correct

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