Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Actual results for January:

-The overall revenue and spending variance (i.e.,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report)for January would be closest to:
A) $7,118 U
B) $6,930 U
C) $6,930 F
D) $7,118 F

Question

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
  Actual results for January:
 
-The overall revenue and spending variance (i.e.,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report)for January would be closest to:
A) $7,118 U 
B) $6,930 U 
C) $6,930 F 
D) $7,118 F

Quizplus · Accepted Answer

11ea7761_1769_2136_81a5_69595666cf4a_TB2580_00 11ea7761_1769_4847_81a5_678d6cabc3be_TB2580_00 Because the actual net operating income is less than the flexible budget, the variance is unfavorable (U).

Bartosiewicz Clinic Uses Client-Visits as Its Measure of Activity