Smithson Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,270 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May:
-The net operating income in the flexible budget for May would be closest to:
A) $9,731
B) $9,555
C) $10,293
D) $10,770

Question

Smithson Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,270 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May: 
-The net operating income in the flexible budget for May would be closest to:
A) $9,731 
B) $9,555 
C) $10,293 
D) $10,770

Quizplus · Accepted Answer

The net operating income in the flexible budget is calculated based on the actual level of activity, adjusting the budgeted figures accordingly. The closest value provided is $10,293.

Smithson Clinic Uses Client-Visits as Its Measure of Activity