Higgenbotham Clinic Uses Client-Visits as Its Measure of Activity

question 81

Multiple Choice

Higgenbotham Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,600 client-visits, but its actual level of activity was 3,580 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for May:
-The administrative expenses in the planning budget for May would be closest to:

• A) $5,261
• B) $5,440
• C) $5,232
• D) $5,432

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Definitions:

Differential Cost

Any cost that differs between alternatives in a decision-making situation. This term is synonymous with avoidable cost and relevant cost.

Decision-Making

The cognitive process of selecting a course of action from multiple alternatives.

Cost Alternatives

Different cost scenarios or options evaluated in decision-making processes.

Product Cost

The total cost associated with producing a product, including direct labor, direct materials, and manufacturing overhead.