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:
A)$17,717 
B)$17,587 
C)$18,502 
D)$18,440

Quizplus · Accepted Answer

To find the amount of medical supplies in the flexible budget, we need to use the formula:

Flexible Budget = Budgeted amount + (Budgeted amount x Budgeted change in activity level)

The budgeted amount for medical supplies is $16,700. The clinic's actual activity level is 2,710 client-visits, which is 10 more than the budgeted amount of 2,700. This represents a 0.37% increase in activity level (10/2,700).

Substituting these values into the formula, we get:

Flexible Budget for Medical Supplies = $16,700 + ($16,700 x 0.0037) = $18,502

Therefore, the closest option is C ($18,502).

Zelenka Clinic Uses Client-Visits as Its Measure of Activity