Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting:
Actual results for January:
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for January would be closest to:
A) $7,118 U
B) $6,930 U
C) $6,930 F
D) $7,118 F

Question

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting:
 Actual results for January:
 The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for January would be closest to:
A) $7,118 U 
B) $6,930 U 
C) $6,930 F 
D) $7,118 F

Quizplus · Accepted Answer

11eacbfc_c58d_24a2_8ffe_65c6c739f61d_TB7552_00 11eacbfc_c58d_4bb3_8ffe_334d6b2631fc_TB7552_00 Because the actual net operating income is less than the flexible budget, the variance is unfavorable (U).

Bartosiewicz Clinic Uses Client-Visits as Its Measure of Activity