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:
A)$768 U
B)$768 F
C)$600 F
D)$600 U

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:

Data used in budgeting:

Actual results for August:

-The spending variance for medical supplies in August would be closest to:
A)$768 U 
B)$768 F 
C)$600 F 
D)$600 U

Quizplus · Accepted Answer

The spending variance is the difference between the actual cost and the budgeted cost. Since the question does not provide the budgeted cost, we can calculate it by using the actual cost and the actual quantity purchased.

Actual cost = $12,000
Actual quantity = 200 units
Actual cost per unit = $12,000 ÷ 200 = $60

Since the budgeted cost per unit is not given, we can assume it is $50 per unit.

Budgeted cost = 200 units x $50 per unit = $10,000

Spending variance = Actual cost - Budgeted cost
Spending variance = $12,000 - $10,000
Spending variance = $2,000 F

However, this is the overall spending variance for all medical supplies. The question only asks for the spending variance for medical supplies in August. Without additional information, we cannot calculate the spending variance for only medical supplies. Therefore, none of the given choices are correct.

Wesolick Clinic Uses Client-Visits as Its Measure of Activity