Lizana Clinic Uses Client-Visits as Its Measure of Activity

question 252

Multiple Choice

Lizana Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,680 client-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:
-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 December would be closest to:

• A)$4,850 F
• B)$5,180 U
• C)$4,850 U
• D)$5,180 F

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Definitions:

Mutual Mistake

A situation in contract law where all parties involved have a mistaken belief about a basic assumption on which the contract is based, potentially making the contract voidable.

Risk of Loss

The potential for an asset to decrease in value or for an event to cause financial hardship.

Jewelry Store

A retail business establishment specialized in selling jewelry, including rings, necklaces, earrings, and bracelets.

Insurable Interest

A requirement in insurance policies that the policyholder must stand to suffer a financial loss from the insured event, giving them a legitimate interest in seeking coverage.