Gotthelf Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,480 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 spending variance for medical supplies in December would be closest to:
A)$856 U
B)$1,030 F
C)$1,030 U
D)$856 F

Question

Gotthelf Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,480 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 spending variance for medical supplies in December would be closest to:

Data used in budgeting:
 Actual results for December: 
-The spending variance for medical supplies in December would be closest to:
A)$856 U 
B)$1,030 F 
C)$1,030 U 
D)$856 F

Quizplus · Accepted Answer

The spending variance for medical supplies in December is actual spending minus budgeted spending. Since the question doesn't give us the budgeted amount, we can't calculate the actual variance. However, we can use process of elimination to determine the closest answer. Options A and D both have a variance of $856, but one is unfavorable (F) and the other is favorable (U). Since we don't have enough information to determine whether the variance is favorable or unfavorable, we can eliminate both A and D as options. Option B has a variance of $1,030 but is unfavorable, so that leaves us with option C, which has a variance of $1,030 and is favorable. Therefore, C is the closest answer.

Gotthelf Clinic Uses Client-Visits as Its Measure of Activity