Question

30 Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 5,300 client-visits, but its actual level of activity was 5,320 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January Data used in budgeting: Fixed Variable element element per per month client-visit $37.30 Revenue Personnel expenses Medical supplies Occupancy expenses Administrative expenses Total expenses $29,300 1,600 10,300 6,800 $48,000 $13.30 7.30 1.00 0.40 $22.00 Actual results for January: Revenue Personnel expenses Medical supplies Occupancy expenses Administrative expenses $150,300 $ 70,090 $ 20,226 $ 14,100 $ 7,580 The activity variance for net operating income in January would be closest to: Multiple Choice $306F $5,214 U Oo oo $306U $5,214 F

Answer 1

Calculation of activity variance
		planning budget	Flexible budget	activity variance
revenues		197690	198436	746	F
(5300*37.30),(5320*30)
expenses
personal expenses		99790	100056	-266	U
medical supplies		40290	40436	-146	U
occupany exp		15600	15620	-20	U
administrative exp		8920	8928	-8	U
total expenses		164600	165040	-440	U
net operating income		33090	33396	306	F
Option "a" IS correct