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

Understand the procedures for calculating and managing inventory levels within the budgeting process.

Recognize the importance of accurate and realistic budget preparation, including the ethical considerations involved.

Explain the concept of participative budgeting and its potential benefits and drawbacks.

Distinguish between budgeting and long-range planning and their respective roles in organizational goal achievement.

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Definitions:

Fixed Assets

Tangible assets purchased for long-term use and not likely sold in the normal course of business, such as buildings, machinery, and equipment.

Long-Lived Assets

Assets that provide economic benefits to a business over a prolonged period, typically more than one year, such as buildings, machinery, and equipment.

Fixed Assets

Enduring assets with physical presence utilized in business activities, not foreseen to be liquidated or changed to cash within twelve months.

Depreciable Cost

The difference between a fixed asset’s initial cost and its residual value.