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Askland Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 3,100...

Askland Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 3,100 client-visits, buts its actual level of activity was 3,130 client-visits.  The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Data used in budgeting:

                                                                                                Fixed                            Variable

                                                                                           amount per                         amount per

                                                                                                month                          client-visit

Revenue ……………………………………………………                               -                                   $28.80

Personnel expenses ………………………………….                                $22,100                        $ 8.60

Medical supplies ……………………………………….                                   1,300                            5.50

Occupancy expenses………………………………..                                     6,300                            1.00

Administrative expenses ………………………….                                    3,500                              .40

Total expenses …………………………………………                                $33,200                        $15.50

Actual results for October:

Revenue ………………………………………………….                                 $86,454

                                                                                                   Total              Fixed Portion    

Personnel expenses………………………………..                                  $47,098            $24,350

Medical supplies……………………………………..                                  $18,925            $  1,290

Occupancy expenses………………………………                                   $  9,170            $  6,520

Administrative expenses………………………..                                   $  4,972            $  3,640

Required:

Part a—Prepare budgeted amounts for the planned visits and the actual visits (i.e. prepare a flexible

               budget)

Part b—Prepare a flexible budget performance report for October.

Part c—Answer the following questions:

  1. What is the amount of the total personnel expenses in the planning budget for October?
  1. What is the amount of total medical supplies in the flexible budget for actual visits in October?

  1. What is the amount of the revenue variance for October?  Is the variance favorable or

unfavorable?  Explain why it is favorable or unfavorable.

  1. What is the total spending variance for personnel expenses for October?  Is the variance favorable or unfavorable?  Explain why it is favorable or unfavorable.

Solutions

Expert Solution


ekkarill92 answered 1 year ago
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