Question

Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

	Fixed Element per Month			Variable element per client-visit
Revenue		-		$	40.00
Personnel expenses	$	32,400		$	13.40
Medical supplies		1,500			4.80
Occupancy expenses		9,100			2.10
Administrative expenses		6,700			0.40
Total expenses	$	49,700		$	20.70

Actual results for December:

Revenue	$	134,170
Personnel expenses	$	80,776
Medical supplies	$	17,302
Occupancy expenses	$	15,754
Administrative expenses	$	8,296

The personnel expenses in the planning budget for December would be closest to:

Multiple Choice

• $76,620

• $77,156

• $79,809

• $80,776

Answer 1

Personnel expenses in the planning budget

= Fixed + Variable

= 32,400 + (13.40*3300)

= 32,400 + 44,220

= 76,620