Kirnon Clinic Uses Client-Visits as Its Measure of Activity

question 194

Multiple Choice

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The activity variance for net operating income in July would be closest to:

• A) $235 F
• B) $235 U
• C) $2,825 F
• D) $2,825 U

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Definitions:

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that must be held by a commercial bank.

Checkable Deposit Liabilities

These are bank account deposits that are immediately available to make payments and transfers, typically seen in checking accounts.

Excess Reserves

Funds that banks hold over and above the required minimum reserves set by the central bank, available for lending or investment.

United States Bonds

United States Bonds are debt securities issued by the U.S. Department of the Treasury to finance government spending as an alternative to taxation.