Hepburn Clinic Uses Client-Visits as Its Measure of Activity

question 293

Multiple Choice

Hepburn Clinic uses client-visits as its measure of activity.During July, the clinic budgeted for 3, 200 client-visits, but its actual level of activity was 3, 180 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting for July: The administrative expenses in the planning budget for July would be closest to:

• A)$4, 568
• B)$4, 418
• C)$4, 597
• D)$4, 420

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Definitions:

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories (assets, liabilities, and equity) is represented as a proportion of total value.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, typically comprising the balance sheet, income statement, and cash flow statement.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equities) or income statement categories (revenues and expenses) is represented as a proportion of the total account.