Hagel Clinic Uses Client-Visits as Its Measure of Activity

question 293

Multiple Choice

Hagel Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,300 client-visits, but its actual level of activity was 2,320 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The spending variance for medical supplies in July would be closest to:

• A)$580 U
• B)$580 F
• C)$728 F
• D)$728 U

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Definitions:

Days' Sales in Receivable

A financial metric that indicates the average number of days it takes for a company to collect payment after a sale has been made, illustrating the liquidity and efficiency of the company's receivables.

Financial Records

Documents and files that track the financial activities of a person or entity, providing a basis for financial planning and decision-making.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of the business, whichever is longer.

Balance Sheet

A financial statement that displays the company's assets, liabilities, and shareholders' equity at a specific point in time, offering insight into its fiscal health.