Gotthelf Clinic Uses Client-Visits as Its Measure of Activity

question 192

Multiple Choice

Gotthelf Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,480 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 medical supplies in the flexible budget for December would be closest to:

• A)$23,696
• B)$22,650
• C)$23,318
• D)$22,476

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Definitions:

Inflation Rate

The annual percentage increase in the general price level of goods and services, reflecting the rate at which the purchasing power of currency is eroded.

Market Basket

A fixed list of items, used to track the progress of inflation in an economy or to compare costs of living.

CPI

Refers to the Consumer Price Index, a metric that calculates the weighted average price of a selection of consumer items and services including food, medical care, and transportation.

Rate of Inflation

The inflation of general prices for goods and services in an economy over a particular period of time.