Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:
Actual results for February:
The medical supplies in the flexible budget for February would be closest to:
A) $29,436
B) $30,789
C) $29,325
D) $28,700

Question

Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:
 Actual results for February:
 The medical supplies in the flexible budget for February would be closest to:
A) $29,436 
B) $30,789 
C) $29,325 
D) $28,700

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $1,200 + ($12.50 × 2,250) = $29,325

Fager Clinic Uses Client-Visits as Its Measure of Activity