Question

Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

	Fixed Element per Month	Variable element per client-visit
Revenue	$ 0	$40.00
Personnel expenses	$32,400	$13.40
Medical supplies	1,500	4.80
Occupancy expenses	9,100	2.10
Administrative expenses	6,700	0.40
Total expenses	$49,700	$20.70

Actual results for December:

Revenue	$134,170
Personnel expenses	$ 80,776
Medical supplies	$ 17,302
Occupancy expenses	$ 15,754
Administrative expenses	$ 8,296

The net operating income in the flexible budget for December would be closest to:

Multiple Choice

• $13,990

• $14,762

• $11,898

• $12,188

Answer 1