Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September:Data used in budgeting: Actual results for September:
The revenue variance for September would be closest to:
A) $210 U
B) $1,990 F
C) $1,990 U
D) $210 F

Question

Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September:Data used in budgeting:  Actual results for September:
 The revenue variance for September would be closest to:
A) $210 U 
B) $1,990 F 
C) $1,990 U 
D) $210 F

Quizplus · Accepted Answer

First, we need to calculate the budgeted revenue for September using the formula given - Budgeted revenue = Budgeted visits x Budgeted price per visit.
Budgeted revenue = 2,100 x $95 = $199,500

Actual revenue = Actual visits x Actual price per visit = 2,140 x $100 = $214,000

Revenue variance = Actual revenue - Budgeted revenue = $214,000 - $199,500 = $14,500

Since the actual revenue is higher than the budgeted revenue, the variance is favorable or "F". Therefore, the answer is C) $1,990 U (because we add the favorable variance to the budgeted revenue).

Bracken Clinic Uses Client-Visits as Its Measure of Activity