Guareno Clinic Uses Client-Visits as Its Measure of Activity

question 101

Multiple Choice

Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 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:
Actual results for December:
The administrative expenses in the planning budget for December would be closest to:

• A) $4,210
• B) $4,290
• C) $4,300
• D) $4,296

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Definitions:

Capital Budgeting

The process of planning and evaluating expenditures on assets whose cash flows are expected to extend beyond one year.

Undepreciated Capital Cost (UCC)

The amount remaining to be claimed as Capital Cost Allowance over time for an asset class.

Class

A category or grouping used to organize items, objects, or concepts based on shared characteristics or attributes.

Declining-Balance Depreciation

A method of depreciation that results in larger depreciation expenses during the earlier years of an asset's life and smaller charges in the later years.