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 spending variance for medical supplies in August would be closest to:

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 spending variance for medical supplies in August would be closest to:

Quizplus · Accepted Answer

To calculate the spending variance for medical supplies, we need to use the formula:

Spending variance = Actual cost - Expected cost

Expected cost = Budgeted rate x Actual activity

Expected cost for medical supplies = $0.45 x 2,870 client-visits = $1,291.50

Actual cost for medical supplies = $1,891

Spending variance = $1,891 - $1,291.50 = $599.50

The spending variance for medical supplies is $599.50 F, which is closest to option C, $600 F.

Wesolick Clinic Uses Client-Visits as Its Measure of Activity