Asked by Ananaya Sharma on May 18, 2024
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Furney Clinic uses patient-visits as its measure of activity. During May, the clinic budgeted for 3,400 patient-visits, but its actual level of activity was 3,000 patient-visits. The clinic bases its budgets on the following information: Revenue should be $38.00 per patient-visit. Personnel expenses should be $36,000 per month plus $10.80 per patient-visit. Medical supplies should be $1,000 per month plus $6.00 per patient-visit. Occupancy expenses should be $9,300 per month plus $2.00 per patient-visit. Administrative expenses should be $5,500 per month plus $0.30 per patient-visit. The clinic reported the following actual results for May:
Required:Prepare the clinic's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U).
Patient-visits
The total number of times patients are seen or treated by healthcare professionals, typically measured for a specific period.
Revenue
The overall revenue accrued from the sales of products or services pertinent to a company's main business activities.
Spending Variances
The gap between what was planned to be spent according to the budget and the real amount expended.
- Analyze budget deviations to conclude if they represent a gain or a loss.
- Evaluate economic performance by analyzing flexible budget reports.
- Implement cost and revenue formulae for the generation of budget documents.
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Learning Objectives
- Analyze budget deviations to conclude if they represent a gain or a loss.
- Evaluate economic performance by analyzing flexible budget reports.
- Implement cost and revenue formulae for the generation of budget documents.
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