Leist Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,170 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The occupancy expenses in the flexible budget for September would be closest to:
A) $13,215
B) $12,808
C) $13,583
D) $12,880

Question

Leist Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,170 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:  The occupancy expenses in the flexible budget for September would be closest to:
A) $13,215 
B) $12,808 
C) $13,583 
D) $12,880

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $7,600 + ($2.40 × 2,170) = $12,808

Leist Clinic Uses Client-Visits as Its Measure of Activity