Question - Lizana Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,700 clientvisits, but its actual level of activity was 3,680 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:
|
Fixed Element
|
Variable Per month client-visit
|
|
Revenue
|
-
|
39.40
|
|
|
|
|
Personnel expenses
|
27,300
|
11.50
|
|
Medical supplies
|
1,500
|
5.60
|
|
Occupancy expenses
|
10,100
|
1.00
|
|
Administrative expenses
|
6,900
|
0.30
|
|
Total expenses
|
45,800
|
18.40
|
|
|
|
|
Actual results for December:
|
|
|
|
Revenue
|
126,712
|
|
|
Personnel expenses
|
71,560
|
|
|
Medical supplies
|
22,628
|
|
|
Occupancy expenses
|
14,350
|
|
|
Administrative expenses
|
8,104
|
|
1. The net operating income in the planning budget for December would be closest to:
A. $10,125
B. $10,016
C. $14,920
D. $15,250
2. The net operating income in the flexible budget for December would be closest to:
A. $15,250
B. $10,125
C. $10,016
D. $14,920
3. The activity variance for net operating income in December would be closest to:
A. $330 U
B. $330 F
C. $5,180 U
D. $5,180 F
4. 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 December would be closest to:
A. $4,850 F
B. $5,180 U
C. $4,850 U
D. $5,180 F