Miao Clinic uses client-visits as its measure of activity.During July,the clinic budgeted for 3,000 client-visits,but its actual level of activity was 2,980 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The spending variance for medical supplies in July would be closest to:

Question

Miao Clinic uses client-visits as its measure of activity.During July,the clinic budgeted for 3,000 client-visits,but its actual level of activity was 2,980 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting:  Actual results for July:  The spending variance for medical supplies in July would be closest to:

Quizplus · Accepted Answer

The formula used to budget for medical supplies is:

$6.00 per client-visit

The budgeted cost of medical supplies for 3,000 client-visits would be:

$6.00 per client-visit x 3,000 client-visits = $18,000

The actual cost of medical supplies for 2,980 client-visits was:

$5.50 per client-visit x 2,980 client-visits = $16,390

The difference between the budgeted cost and the actual cost is the spending variance:

Spending variance = Budgeted cost - Actual cost
Spending variance = $18,000 - $16,390
Spending variance = $1,610 U

Therefore, the closest choice is C) $1,100 U.

Miao Clinic Uses Client-Visits as Its Measure of Activity