Spohn Clinic Uses Client-Visits as Its Measure of Activity

question 332

Multiple Choice

Spohn Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,370 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for February: The net operating income in the planning budget for February would be closest to:

• A) $11,862
• B) $11,653
• C) $11,040
• D) $10,617

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Definitions:

Ledger

A book or collection of financial accounts where transactions are summarized and classified.

Transactions

Actions or activities conducted by a company or between parties that affect the financial position, such as sales, purchases, and payments.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net profit.

Statement of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specific period, reflecting net income and dividends paid to shareholders.