Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The activity variance for personnel expenses in July would be closest to:
A) $901 F
B) $901 U
C) $121 F
D) $121 U

Question

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:  The activity variance for personnel expenses in July would be closest to:
A) $901 F 
B) $901 U 
C) $121 F 
D) $121 U

Quizplus · Accepted Answer

11eacbfc_c5aa_225c_8ffe_e909c9066f45_TB7552_00 Because the flexible budget is greater than the planning budget, the variance is unfavorable (U).

Kirnon Clinic Uses Client-Visits as Its Measure of Activity