Werber Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,700 client-visits, but its actual level of activity was 2,730 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
-The activity variance for personnel expenses in January would be closest to:
A) $661 U
B) $261 U
C) $261 F
D) $661 F

Question

Werber Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,700 client-visits, but its actual level of activity was 2,730 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: 
-The activity variance for personnel expenses in January would be closest to:
A) $661 U 
B) $261 U 
C) $261 F 
D) $661 F

Quizplus · Accepted Answer

The activity variance is calculated by comparing the flexible budget to the static budget. If personnel expenses were higher than expected, it would be unfavorable (U).

Werber Clinic Uses Client-Visits as Its Measure of Activity