Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 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 personnel expenses in the planning budget for November would be closest to:
A) $67,700
B) $66,568
C) $66,265
D) $67,525

Question

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 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 personnel expenses in the planning budget for November would be closest to:
A) $67,700 
B) $66,568 
C) $66,265 
D) $67,525

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $29,200 + ($17.50 × 2,200) = $67,700

Keisker Clinic Uses Client-Visits as Its Measure of Activity