Duprey Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,150 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Actual results for January:

-The administrative expenses in the planning budget for January would be closest to:
A) $6,160
B) $6,068
C) $5,930
D) $6,180

Question

Duprey Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,150 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
  Actual results for January:
 
-The administrative expenses in the planning budget for January would be closest to:
A) $6,160 
B) $6,068 
C) $5,930 
D) $6,180

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $5,300 + ($0.40 × 2,200) = $6,180

Duprey Clinic Uses Client-Visits as Its Measure of Activity