Kaina Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 2,970 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
Actual results for May:
The activity variance for personnel expenses in May would be closest to:
A) $213 U
B) $213 F
C) $1,147 U
D) $1,147 F

Question

Kaina Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 2,970 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
 Actual results for May:
 The activity variance for personnel expenses in May would be closest to:
A) $213 U 
B) $213 F 
C) $1,147 U 
D) $1,147 F

Quizplus · Accepted Answer

11eacbfc_c5a7_ff67_8ffe_dbc2427c589f_TB7552_00 Because the flexible budget is less than the planning budget, the variance is favorable (F).

Kaina Clinic Uses Client-Visits as Its Measure of Activity