Federick Clinic uses client-visits as its measure of activity.During October, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 3, 040 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 occupancy expenses in the flexible budget for October would be closest to:
A)$17, 268
B)$18, 289
C)$17, 811
D)$17, 200

Question

Federick Clinic uses client-visits as its measure of activity.During October, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 3, 040 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 occupancy expenses in the flexible budget for October would be closest to:
A)$17, 268 
B)$18, 289 
C)$17, 811 
D)$17, 200

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $12, 100 + ($1.70 × 3, 040)= $17, 268

Federick Clinic Uses Client-Visits as Its Measure of Activity