Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,290 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting:
Actual results for November:
The administrative expenses in the planning budget for November would be closest to:
A) $6,887
B) $6,677
C) $6,697
D) $6,890

Question

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,290 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting:
 Actual results for November:
 The administrative expenses in the planning budget for November would be closest to:
A) $6,887 
B) $6,677 
C) $6,697 
D) $6,890

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $5,900 + ($0.30 × 3,300) = $6,890

Tennies Clinic Uses Client-Visits as Its Measure of Activity