Miao Clinic uses client-visits as its measure of activity.During July, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 2, 980 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Actual results for July: The occupancy expenses in the flexible budget for July would be closest to:
A)$10, 907
B)$11, 054
C)$11, 180
D)$11, 200

Question

Miao Clinic uses client-visits as its measure of activity.During July, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 2, 980 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July:  Actual results for July:  The occupancy expenses in the flexible budget for July would be closest to:
A)$10, 907 
B)$11, 054 
C)$11, 180 
D)$11, 200

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $8, 200 + ($1 × 2, 980)= $11, 180

Miao Clinic Uses Client-Visits as Its Measure of Activity