Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
Actual results for June:

-The occupancy expenses in the flexible budget for June would be closest to:
A) $13,802
B) $14,100
C) $14,040
D) $13,480

Question

Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
  Actual results for June:
 
-The occupancy expenses in the flexible budget for June would be closest to:
A) $13,802 
B) $14,100 
C) $14,040 
D) $13,480

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $9,000 + ($1.50 × 3,360) = $14,040

Chimilio Clinic Uses Client-Visits as Its Measure of Activity