Leven Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 3,050 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for September: The personnel expenses in the planning budget for September would be closest to:
A) $56,535
B) $54,575
C) $55,485
D) $56,000

Question

Leven Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 3,050 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for September:  The personnel expenses in the planning budget for September would be closest to:
A) $56,535 
B) $54,575 
C) $55,485 
D) $56,000

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $23,900 + ($10.70 × 3,000) = $56,000

Leven Clinic Uses Client-Visits as Its Measure of Activity