Wesolick Clinic uses client-visits as its measure of activity.During August, the clinic budgeted for 2, 900 client-visits, but its actual level of activity was 2, 870 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The administrative expenses in the planning budget for August would be closest to:
A)$6, 974
B)$6, 880
C)$6, 874
D)$7, 047

Question

Wesolick Clinic uses client-visits as its measure of activity.During August, the clinic budgeted for 2, 900 client-visits, but its actual level of activity was 2, 870 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting:  Actual results for August:  The administrative expenses in the planning budget for August would be closest to:
A)$6, 974 
B)$6, 880 
C)$6, 874 
D)$7, 047

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $6, 300 + ($0.20 × 2, 900)= $6, 880

Wesolick Clinic Uses Client-Visits as Its Measure of Activity