Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
Actual results for January:
The net operating income in the flexible budget for June would be closest to:
A) $8,957
B) $11,152
C) $11,780
D) $8,748

Question

Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
 Actual results for January:
 The net operating income in the flexible budget for June would be closest to:
A) $8,957 
B) $11,152 
C) $11,780 
D) $8,748

Quizplus · Accepted Answer

11eacbfc_c577_2c06_8ffe_938e05ca802e_TB7552_00 Net operating income = ($15.70 × 3,360) − $41,600 = $11,152

Chimilio Clinic Uses Client-Visits as Its Measure of Activity