Bracken Clinic Uses Client-Visits as Its Measure of Activity

question 303

Multiple Choice

Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting:
Actual results for September:
The revenue variance for September would be closest to:

• A) $210 U
• B) $1,990 F
• C) $1,990 U
• D) $210 F

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Definitions:

Overapplied

Refers to a situation where the allocated costs exceed the actual costs incurred, often seen in manufacturing and budgeting.

Manufacturing Overhead

All indirect factory-related costs associated with the production of a product, including costs related to indirect materials, indirect labor, and other overhead expenses.

Work in Process

Inventory representing partially completed goods that are still in the production process.

Underapplied

A situation where the allocated manufacturing overhead cost is less than the actual overhead costs incurred.