Askland Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 3,100 client-visits, but its actual level of activity was 3,130 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Data used in budgeting:
Actual results for October:
-The activity variance for personnel expenses in October would be closest to:
A)$1,662 F
B)$258 F
C)$258 U
D)$1,662 U

Question

Askland Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 3,100 client-visits, but its actual level of activity was 3,130 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Data used in budgeting:

Actual results for October:

-The activity variance for personnel expenses in October would be closest to:

Data used in budgeting:
 Actual results for October: 
-The activity variance for personnel expenses in October would be closest to:
A)$1,662 F 
B)$258 F 
C)$258 U 
D)$1,662 U

Quizplus · Accepted Answer

To find the activity variance for personnel expenses in October, we need to calculate the difference between the actual personnel expense and the flexible budgeted personnel expense based on the actual activity level.

Actual personnel expense = $25,842
Flexible budgeted personnel expense based on actual activity level = $26,100 (9,000 hours x $2.90 per hour)

Activity variance = Actual personnel expense - Flexible budgeted personnel expense based on actual activity level
Activity variance = $25,842 - $26,100 
Activity variance = $258 U

Therefore, the closest answer is C, $258 U.

Askland Clinic Uses Client-Visits as Its Measure of Activity