Planning Budget Problem Doubleday Clinic uses client-visits as its measure of ac
ID: 2359715 • Letter: P
Question
Planning Budget Problem Doubleday Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,200 client visits, but its actual level of activity was 3,180 client-visits. The clinichas provided the following data concerning the formulas to be used in its budgeting for June: Revenue.........Fixed -0-.......Var.element per client-visit.........$31.20 Personal Exp....Fixed...$31,800....Var. element per client visit....$8.10 Medical Supplies....Fixed....1,700.....Var. element per client visit......4.20 Occupancy exp......Fixed.....7,100....Var.element per client visit......1.10 Administrative Exp.......Fixed.....3,200....Var. element per client visit.....0.10 Total Expenses.....Fixed$43,800.......Var. element per client visit $13.50 The net operating income in the planning budget for June would be closest to....Explanation / Answer
PB = 3,200
FB = 3,180
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- 20 UNITS .... ACTIVITY VARIATION
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SP = $31.20
VC = $13.50
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CM = SP -VC =
= $31.20 - $13.50
= $ 17.7
20 UNITS @ $ 17.7 =
= $ 354 F