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3 November, 17:04

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,690 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Fixed element per month Variable element per client-visit Revenue - $ 36.20 Personnel expenses $ 30,300 $ 11.20 Medical supplies 1,600 6.60 Occupancy expenses 8,400 2.70 Administrative expenses 6,700 0.40 Total expenses $ 47,000 $ 20.90 Actual results for November: Revenue $ 133,763 Personnel expenses $ 71,596 Medical supplies $ 26,768 Occupancy expenses $ 17,875 Administrative expenses $ 7,951 The activity variance for personnel expenses in November would be closest to:

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  1. 3 November, 18:56
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    The correct answer is $814 Unfavorable because actual medical supplies is more than standard.

    Explanation:

    Actual Medical Supplies $26,768

    Standard Medical Supplies for Actual Activity $25,954

    (6.60*3,690+1,600)

    Medical Supplies Spending Variance 814 Unfavorable

    Therefore, The correct answer is $814 Unfavorable because actual medical supplies is more than standard.
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