Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 4,300 client-visits, but its actual level of activity was 4,360 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per client-visit Revenue - $ 41.20 Personnel expenses $ 37,200 $ 12.40 Medical supplies 3,200 9.20 Occupancy expenses 8,400 3.20 Administrative expenses 7,200 0.50 Total expenses $ 56,000 $ 25.30 The activity variance for administrative expenses in July would be closest to:

Question

Business

Osvaldo Carroll

14 October, 00:41

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 4,300 client-visits, but its actual level of activity was 4,360 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per client-visit Revenue - $ 41.20 Personnel expenses $ 37,200 $ 12.40 Medical supplies 3,200 9.20 Occupancy expenses 8,400 3.20 Administrative expenses 7,200 0.50 Total expenses $ 56,000 $ 25.30 The activity variance for administrative expenses in July would be closest to:

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Seamus Bentley · Answer 1

Activity variance for administrative expenses in July $9,380 $9,350 $30U

Explanation:

Flexible budget Static Budget Actvity variance

Client-visits 4,360 4,300 60 F

Variable Administrative expenses

($0.50 x 4,360) $2,180

($0.50 x 4,300) $2,150 $30 U*

Fixed Administrative expenses 7,200 7,200 0

Activity variance for administrative expenses in July $9,380 $9,350 $30U