Gasco Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:
Revenue: $62.90q
Personnel expenses: $28,500 + $20.40q
Medical supplies: $1,400 + $9.90q
Occupancy expenses: $8,200 + $3.30q
Administrative expenses: $4,000 + $0.40q
The clinic reported the following actual results for August:
Required:
Prepare a report showing the clinic's revenue and spending variances for August. Label each variance as favorable (F) or unfavorable (U).

Question

Gasco Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:
Revenue: $62.90q
Personnel expenses: $28,500 + $20.40q
Medical supplies: $1,400 + $9.90q
Occupancy expenses: $8,200 + $3.30q
Administrative expenses: $4,000 + $0.40q
The clinic reported the following actual results for August:  
Required:
Prepare a report showing the clinic's revenue and spending variances for August. Label each variance as favorable (F) or unfavorable (U).

Quizplus · Accepted Answer

The Answer of Gasco Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:
Revenue: $62.90q
Personnel expenses: $28,500 + $20.40q
Medical supplies: $1,400 + $9.90q
Occupancy expenses: $8,200 + $3.30q
Administrative expenses: $4,000 + $0.40q
The clinic reported the following actual results for August:  
Required:
Prepare a report showing the clinic's revenue and spending variances for August. Label each variance as favorable (F) or unfavorable (U).

Gasco Clinic Uses Patient-Visits as Its Measure of Activity