Toadvine Clinic Uses Patient-Visits as Its Measure of Activity

question 165

Essay

Toadvine Clinic uses patient-visits as its measure of activity. During April, the clinic budgeted for 3,800 patient-visits, but its actual level of activity was 3,400 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:
Revenue: $39.70q
Personnel expenses: $38,700 + $11.50q
Medical supplies: $1,000 + $7.30q
Occupancy expenses: $11,700 + $1.30q
Administrative expenses: $6,700 + $0.30q
The clinic reported the following actual results for April: Required:
Prepare a report showing the clinic's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Regular Premium

The amount that is paid on a regular schedule for an insurance policy, to maintain coverage.

Low-risk Driver

A driver who is considered less likely to file an insurance claim and therefore may qualify for lower insurance premiums.

Insurance Premiums

The amounts paid by individuals or businesses for insurance policies to provide coverage against various risks.

Regular Premium

Regular payments made for insurance policies or investment products, which are typically due monthly, quarterly, or annually.