Lizana Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,680 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December

Data used in budgeting:
Actual results for December:
-The net operating income in the flexible budget for December would be closest to:
A)$15,250
B)$10,125
C)$10,016
D)$14,920

Question

Lizana Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,680 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December

Data used in budgeting:

Actual results for December:

-The net operating income in the flexible budget for December would be closest to:

Data used in budgeting:
 Actual results for December: 
-The net operating income in the flexible budget for December would be closest to:
A)$15,250 
B)$10,125 
C)$10,016 
D)$14,920

Quizplus · Accepted Answer

The net operating income in the flexible budget is calculated based on the expected revenues and expenses for the actual level of activity. The closest value provided is $14,920.

Lizana Clinic Uses Client-Visits as Its Measure of Activity