Hagel Clinic Uses Client-Visits as Its Measure of Activity

question 199

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 flexible budget performance 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:

Productivity

The efficiency at which individuals, businesses, or systems produce goods or provide services, often measured by output per unit of input.

Bullwhip Effect

A phenomenon in supply chain management when small fluctuations in demand at the retail level cause progressively larger fluctuations in demand at the wholesale, distributor, and manufacturer levels.

VMI

Vendor Managed Inventory, a business model where the supplier assumes the responsibility of managing their customer's inventory levels.

Entire Inventory Process

The comprehensive procedure of managing the complete lifecycle of inventory from acquisition to sales.