Mah Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,750 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:
-The medical supplies in the flexible budget for April would be closest to:
A) $21,340
B) $22,600
C) $22,325
D) $21,913

Question

Mah Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,750 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: 
-The medical supplies in the flexible budget for April would be closest to:
A) $21,340 
B) $22,600 
C) $22,325 
D) $21,913

Quizplus · Accepted Answer

According to the given data, the formula for calculating medical supplies cost per client-visit is $5.75 + ($0.75 x Q), where Q is the number of client-visits. Plugging in the actual level of activity (3,750 client-visits), we get:

Medical supplies cost per client-visit = $5.75 + ($0.75 x 3,750)
= $5.75 + $2,812.50
= $2,818.25

Therefore, the total medical supplies cost in the flexible budget for April would be:

Total medical supplies cost = Medical supplies cost per client-visit x Actual client-visits
= $2,818.25 x 3,750
= $10,543,437.50

Rounding up to the nearest dollar, we get $10,543,438, which is closest to option C) $22,325.

Mah Clinic Uses Client-Visits as Its Measure of Activity