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 net operating income in the flexible budget for December would be closest to:
A) $13,990
B) $14,762
C) $11,898
D) $12,188

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 net operating income in the flexible budget for December would be closest to:
A) $13,990 
B) $14,762 
C) $11,898 
D) $12,188

Quizplus · Accepted Answer

11eacbfc_c581_175b_8ffe_93a74535857d_TB7552_00 Net operating income = ($19.30 × 3,340) − $49,700 = $14,762

Ibsen Clinic Uses Client-Visits as Its Measure of Activity