Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February:
Data used in budgeting:
Actual results for February:

-The activity variance for personnel expenses in February would be closest to:
A) $845 U
B) $1,075 F
C) $1,075 U
D) $845 F

Question

Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February:
Data used in budgeting:
  Actual results for February:
 
-The activity variance for personnel expenses in February would be closest to:
A) $845 U 
B) $1,075 F 
C) $1,075 U 
D) $845 F

Quizplus · Accepted Answer

11ea7761_1777_5146_81a5_951c613da412_TB2580_00 Because the flexible budget is greater than the planning budget, the variance is unfavorable (U).

Fager Clinic Uses Client-Visits as Its Measure of Activity