Question

A clinic uses patient-visits as its measure of activity. During July, the clinic budgeted for 2,700 patient-visits, but its actual level of activity was 3,200 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:

Revenue: $49.60q

Personnel expenses: $31,200 + $15.10q

Medical supplies: $700 + $9.60q

Occupancy expenses: $10,000 + $2.00q

Administrative expenses: $7,000 + $0.20q

The clinic reported the following actual results for July:

Revenue	$165,680
Personnel expenses	$76,190
Medical supplies	$31,790
Occupancy expenses	$15,960
Administrative expenses	$7,600

Can you prepare a flexible budget performance report showing the clinic's planning (static) budget, flexible budget, and relevant variances for July? Label each variance as favorable (F) or unfavorable (U). The illustration posted on the home page may help with this exercise.

You can copy and paste (and use) the following table in your response.

	Planning Budget	Volume Variance	Flexible Budget	Flexible Budget Variance	Actual Results
Revenue

153 words

Answer 1

	Planning Budget	Volume Variance		Flexible Budget	Flexible Budget Variance		Actual Results
Revenue	133920	24800	F	158720	6960	F	165680
Expenses:
Personnel expenses	71970	7550	U	79520	3330	F	76190
Medical supplies	26620	4800	U	31420	370	U	31790
Occupancy expenses	15400	1000	U	16400	440	F	15960
Administrative expenses	7540	100	U	7640	40	F	7600
Total expenses	121530	13450	U	134980	3440	F	131540
Net operating income	12390	11350	F	23740	10400	F	34140