Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The activity variance for administrative expenses in July would be closest to:
A) $2 U
B) $162 F
C) $2 F
D) $162 U

Question

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:  The activity variance for administrative expenses in July would be closest to:
A) $2 U 
B) $162 F 
C) $2 F 
D) $162 U

Quizplus · Accepted Answer

11eacbfc_c5aa_496e_8ffe_15dcdb84a18d_TB7552_00 Because the flexible budget is greater than the planning budget, the variance is unfavorable (U).

Kirnon Clinic Uses Client-Visits as Its Measure of Activity