Asked by Lauren Byrd-Moreno on Jun 11, 2024
Verified
Speyer Medical Clinic measures its activity in terms of patient-visits.Last month, the budgeted level of activity was 1,530 patient-visits and the actual level of activity was 1,490 patient-visits.The cost formula for administrative expenses is $4.00 per patient-visit plus $15,300 per month.The actual administrative expense was $19,810.Last month the clinic's spending variance for administrative expenses was:
A) $820 F
B) $160 F
C) $1,450 F
D) $1,610 F
Administrative Expenses
Costs related to the general operation of a company, including expenses such as rent, salaries of administrative staff, and office supplies.
Patient-Visits
A measure used in healthcare to quantify the number of encounters a patient has with medical professionals.
Spending Variance
is the difference between the budgeted amount of expenses and the actual amount spent.
- Understand the theory and computation related to spending variances for total costs.
Verified Answer
Because the flexible budget is greater than the actual expense, the variance is favorable (F).
Learning Objectives
- Understand the theory and computation related to spending variances for total costs.
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