Question

Jiminian Clinic uses client visits as its measure of activity. During March, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,660 client-visits.

The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for March:Data used in budgeting:Fixed element per month Variable element per client-visitRevenue ? $31.00Personnel expenses $35,700 $8.10Medical supplies $1,800 $4.50Occupancy expenses $8,800 $1.10Administrative expenses $3,900 $0.40Total expenses $50,200 $14.10Actual results for March:Revenue $115,860Personnel expenses $66,226Medical supplies $18,810Occupancy expenses $12,356Administrative expenses $5,224

The medical supplies in the flexible budget for March would be closest to:A. $19,016B. $18,270C. $18,607D. $18,450

Answer 1

The correct answer is B.

Step-by-step explanation:

Giving the following information:

Jiminian Clinic uses client visits as its measure of activity. During March, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,660 client-visits.

Estimated Medical supplies:

Fixed= $1,800

Variable $4.50

Allocated Medical Supplies= 1,800 + 4.5*3,660= $18,270