Duprey Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,150 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 personnel expenses in the planning budget for January would be closest to:
A) $73,100
B) $72,200
C) $69,720
D) $71,341

Question

Duprey Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,150 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 personnel expenses in the planning budget for January would be closest to:
A) $73,100 
B) $72,200 
C) $69,720 
D) $71,341

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $33,500 + ($18 × 2,200) = $73,100

Duprey Clinic Uses Client-Visits as Its Measure of Activity