Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:
Data used in budgeting:
Actual results for November:

-The occupancy expenses in the flexible budget for November would be closest to:
A) $11,500
B) $10,920
C) $11,020
D) $11,480

Question

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:
Data used in budgeting:
  Actual results for November:
 
-The occupancy expenses in the flexible budget for November would be closest to:
A) $11,500 
B) $10,920 
C) $11,020 
D) $11,480

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $7,100 + ($2 × 2,190) = $11,480

Keisker Clinic Uses Client-Visits as Its Measure of Activity