Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
Actual results for December:
The personnel expenses in the planning budget for December would be closest to:
A) $76,620
B) $77,156
C) $79,809
D) $80,776

Question

Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
 Actual results for December:
 The personnel expenses in the planning budget for December would be closest to:
A) $76,620 
B) $77,156 
C) $79,809 
D) $80,776

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $32,400 + ($13.40 × 3,300) = $76,620

Ibsen Clinic Uses Client-Visits as Its Measure of Activity