Lantagne Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,820 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:

Actual results for May:

-The activity variance for net operating income in May would be closest to:
A)$386 F
B)$386 U
C)$284 U
D)$284 F

Question

Lantagne Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,820 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:

Actual results for May:

-The activity variance for net operating income in May would be closest to:

Data used in budgeting:

Actual results for May:

-The activity variance for net operating income in May would be closest to:
A)$386 F 
B)$386 U 
C)$284 U 
D)$284 F

Quizplus · Accepted Answer

The activity variance is the difference between the actual net operating income and the budgeted net operating income. The budgeted net operating income is $1,000,000. The actual net operating income is $1,386,000. Therefore, the activity variance is $1,386,000 - $1,000,000 = $386,000.

Lantagne Clinic Uses Client-Visits as Its Measure of Activity