Fongeallaz Clinic bases its budgets on the activity measure patient-visits. Duri
ID: 2490493 • Letter: F
Question
Fongeallaz Clinic bases its budgets on the activity measure patient-visits. During January, the clinic planned for 2,300 patient-visits, but its actual level of activity was 2,100 patient-visits. Revenue should be $52.50 per patient-visit. Personnel expenses should be $34,100 per month plus $15.10 per patient-visit. Medical supplies should be $1,600 per month plus $8.40 per patient-visit. Occupancy expenses should be $9,400 per month plus $1.90 per patient-visit. Administrative expenses should be $3,500 per month plus $0.10 per patient-visit.
Required:
Prepare a report showing the clinic's activity variances for January. Indicate in each case whether the variance is favorable (F) or unfavorable (U).
Explanation / Answer
Statement of Activity Variance Activities Cost formula Budgeted activity Actual activity Variance for 2300 patients for 2100 patients Revenue $52.50 per patient 120750 110250 -10500 Unfavourable Personal expenses $34100+$15.10 per month 68830 65810 -3020 Favourable Medical supplies $1600+$8.40 per patient 20920 19240 -1680 Favourable Occupancy Expenses $9400+$1.90 per patient 13770 13390 -380 Favourable Administrative expenses $3500 + $0.10 per patient 3730 3710 -20 Favourable Net Income revenue - all expenses 13500 8100 -5400 Unfavourable