Carlisle Clinic Uses patient-visits as its measure of activity. During December,
ID: 2370368 • Letter: C
Question
Carlisle Clinic Uses patient-visits as its measure of activity. During December, the clinic budgeted for 2,500 patient-visits., but its actual level of activity was 2,100 patient-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:
Revenue......Fixed element per month: --, Variable element per patient-visit: $47.70
Personnel expenses ..... Fixed element per month: $29,400, Variable element per patient-visit: $14.00
Medical supplies ..... Fixed element per month: $600, Variable element per patient-visit: $8.30
Occupancy expenses ..... Fixed element per month: $7,400, Variable element per patient-visit: $2.20
Administrative expenses ..... Fixed element per month: $6,400, Variable element per patient-visit: $0.20
Actual results for December:
Revenue ...... $100,890
Personnel expenses .... $59,750
Medical supplies ..... $17,950
Occupancy expenses .... $11,920
Administrative expenses .... $$7,150
Required: Prepare a report showing the clinic's revenue and spending variances for December. Label each variance as favorable (F) or unfavorable (U)
Explanation / Answer
Hi,
Please find the answer as follows:
Flexible Budget Actual Budget Revenue and Spending Variances Patient Visits (Q) 2100 2100
Revenue 100170 100890 720 F
Personnel Expenses 58800 59750 950 U Medical Supplies 18030 17950 80 F Occupancy Expenses 12020 11920 100 F Administrative Expenses 6820 7150 330 U Total Expense 95670 96770 1100 U Net Operating Income 4500 4120 380 U