Carlisle Clinic Uses Patient-Visits as Its Measure of Activity

question 198

Essay

Carlisle Clinic uses patient-visits as its measure of activity. During December, the clinic budgeted for 2,500 patient-visits, but its actual level of activity was 2,100 patient-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: Required:
Prepare a report showing the clinic's revenue and spending variances for December. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Cash

Money in the form of bills or coins, available for transactions or on hand.

Equipment

Tangible assets used in operations, such as machinery or office hardware, which are not intended for sale in the regular course of business.

Cash Flow

The net amount of cash being transferred into and out of a business, especially in terms of operational, investing, and financing activities.

Operating Activities

Activities directly connected to the primary revenue-producing operations of a company, reported in the statement of cash flows.