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 medical supplies in the flexible budget for June would be closest to:
A)$17,717
B)$17,587
C)$18,502
D)$18,440

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 medical supplies in the flexible budget for June would be closest to:

-The medical supplies in the flexible budget for June would be closest to:
A)$17,717 
B)$17,587 
C)$18,502 
D)$18,440

Quizplus · Accepted Answer

Since we are dealing with a flexible budget, we need to calculate the cost based on the actual number of procedures performed during the month. The question tells us that there were 348 procedures performed, so we need to calculate the cost of medical supplies for that volume. Using the formula given in the question:

Flexible budget cost = Budgeted cost per unit x Actual volume

= $53 x 348

= $18,444

This calculation gives us a cost that is closest to option C ($18,502). Therefore, C is the best choice.

Zelenka Clinic Uses Client-Visits as Its Measure of Activity