Question

Leist Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,170 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per client-visit Revenue - $ 50.80 Personnel expenses $ 26,600 $ 15.60 Medical supplies 1,400 9.40 Occupancy expenses 7,600 2.40 Administrative expenses 5,300 0.10 Total expenses $ 40,900 $ 27.50 The medical supplies in the flexible budget for September would be closest to:

Answer 1

Answer: Medical supplies in flexible budget = $21,798

Explanation:

Given:

Level of activity = 2,170

Personnel expenses = $ 26,600

Medical supplies = $1,400

Occupancy expenses = $7,600

Administrative expenses = 5,300

Total expenses = $ 40,900

Medical supplies in flexible budget = [level of activity × $Element per client_{medical supplies}$] + Medical supplies

Medical supplies in flexible budget = [(2170 × 9.40)+1400] = $21,798