Zelenka Clinic uses client-visits as its measure of activity.During June, the clinic budgeted for 2, 700 client-visits, but its actual level of activity was 2, 710 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting for June: The administrative expenses in the planning budget for June would be closest to:
A)$5, 671
B)$5, 511
C)$5, 531
D)$5, 670

Question

Zelenka Clinic uses client-visits as its measure of activity.During June, the clinic budgeted for 2, 700 client-visits, but its actual level of activity was 2, 710 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting for June:  The administrative expenses in the planning budget for June would be closest to:
A)$5, 671 
B)$5, 511 
C)$5, 531 
D)$5, 670

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $5, 400 + ($0.10 × 2, 700)= $5, 670

Zelenka Clinic Uses Client-Visits as Its Measure of Activity