Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Fixed element per month Variable element per client-visit Revenue - $ 35.80 Personnel expenses $ 29,900 $ 10.80 Medical supplies 1,400 6.20 Occupancy expenses 8,000 2.30 Administrative expenses 6,300 0.40 Total expenses $ 45,600 $ 19.70 Actual results for November: Revenue $ 125,117 Personnel expenses $ 67,564 Medical supplies $ 23,840 Occupancy expenses $ 15,543 Administrative expenses $ 7,479 The activity variance for personnel expenses in November would be closest to:

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Business

22 October, 23:35

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Fixed element per month Variable element per client-visit Revenue - $ 35.80 Personnel expenses $ 29,900 $ 10.80 Medical supplies 1,400 6.20 Occupancy expenses 8,000 2.30 Administrative expenses 6,300 0.40 Total expenses $ 45,600 $ 19.70 Actual results for November: Revenue $ 125,117 Personnel expenses $ 67,564 Medical supplies $ 23,840 Occupancy expenses $ 15,543 Administrative expenses $ 7,479 The activity variance for personnel expenses in November would be closest to:

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Answers (1)

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Reece Whitney · Answer 1

The correct answer is $108.

Explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the activity variance by using following formula:

Activity variance = Planning budget - Flexible budget

Where, Planning budget = $29,900 + (3,500 * $10.80)

= $67,700

And Flexible budget = $29,900 + (3,490 * $10.80)

= $67,592

By putting the value we get,

Activity variance = $67,700 - $67,592

= $108