Question
Quesnel Clinic bases its budgets on the activity measure patient-visits. During February, the clinic planned for 2,800 patient-visits, but its actual level of activity was
Quesnel Clinic bases its budgets on the activity measure patient-visits. During February, the clinic planned for 2,800 patient-visits, but its actual level of activity was 3,000 patient-visits. Revenue is budgeted at $29.00 per patient-visit. The clinic has provided the following data concerning the expense formulas it uses in its budgeting:
| Fixed element per month | Variable element per patient-visit | ||||
Salary expenses | $ | 22,100 |
| $ | 8.30 |
|
Medical supplies | $ | 800 |
| $ | 4.10 |
|
Rent and utilities expenses | $ | 6,000 |
| $ | 1.00 |
|
General expenses | $ | 2,800 |
| $ | 0.10 |
|
Required:
Prepare a report showing the clinic's activity variances for February. Indicate in each case whether the variance is favorable (F) or unfavorable (U).
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