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 administrative expenses in the planning budget for September would be closest to:
A) $5,400
B) $5,346
C) $5,405
D) $5,435

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 administrative expenses in the planning budget for September would be closest to:
A) $5,400 
B) $5,346 
C) $5,405 
D) $5,435

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $5,100 + ($0.10 × 3,000) = $5,400

Leven Clinic Uses Client-Visits as Its Measure of Activity