Hagel Clinic Uses Client-Visits as Its Measure of Activity

question 206

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 overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the revenue and spending variances report) for July would be closest to:

• A)$6,120 U
• B)$5,722 F
• C)$5,722 U
• D)$6,120 F

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Definitions:

Standby Underwriting

An arrangement in which an underwriter agrees to buy any unsold shares after a public offering, ensuring the issuer sells all shares but only if necessary.

Common Shares

Type of equity security that represents ownership in a corporation, providing voting rights and entitling the holder to a share of the company’s success through dividends and/or capital appreciation.

Federal Statutes

Laws enacted by the United States Congress that apply nationally.

Administrative Rules

Regulations issued by government agencies to carry out the intent of legislation.