Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:
Actual results for February:
The personnel expenses in the planning budget for February would be closest to:
A) $80,675
B) $80,445
C) $79,600
D) $78,657

Question

Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:
 Actual results for February:
 The personnel expenses in the planning budget for February would be closest to:
A) $80,675 
B) $80,445 
C) $79,600 
D) $78,657

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $32,300 + ($21.50 × 2,200) = $79,600

Fager Clinic Uses Client-Visits as Its Measure of Activity