Jiminian Clinic Uses Client-Visits as Its Measure of Activity

question 119

Multiple Choice

Jiminian Clinic uses client-visits as its measure of activity. During March, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,660 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for March:

Data used in budgeting:

Actual results for March:

-The net operating income in the flexible budget for March would be closest to:

• A)$11,654
• B)$13,101
• C)$12,330
• D)$13,389

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Definitions:

Purchase Method

An accounting technique used in mergers and acquisitions where the buyer records the assets and liabilities of the acquired company at fair market value.

Book Value

The net value of a company's assets found on its balance sheet, and calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Market Value

The current price at which an asset or service can be bought or sold in the market.

Total Assets

Represents the sum of all funds, properties, and assets owned by a company or individual at a given time.