Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
Actual results for December:

-The administrative expenses in the planning budget for December would be closest to:
A) $4,210
B) $4,290
C) $4,300
D) $4,296

Question

Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
  Actual results for December:
 
-The administrative expenses in the planning budget for December would be closest to:
A) $4,210 
B) $4,290 
C) $4,300 
D) $4,296

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $3,800 + ($0.20 × 2,500) = $4,300

Guareno Clinic Uses Client-Visits as Its Measure of Activity