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 medical supplies in the flexible budget for August would be closest to:
A)$17,640
B)$17,048
C)$17,472
D)$16,697

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 medical supplies in the flexible budget for August would be closest to:
A)$17,640 
B)$17,048 
C)$17,472 
D)$16,697

Quizplus · Accepted Answer

The flexible budget formula for medical supplies is: 
$5.50 per client-visit

Using the actual level of activity of 2,870 client-visits, we can calculate the flexible budget amount for medical supplies: 
2,870 x $5.50 = $15,785

However, the actual amount spent on medical supplies in August was $17,472. This means the clinic exceeded its flexible budget for medical supplies by: 
$17,472 - $15,785 = $1,687

Therefore, the actual amount spent on medical supplies is higher than the amount in any of the answer choices, but the closest option is (C) $17,472.

Wesolick Clinic Uses Client-Visits as Its Measure of Activity