Lizana Clinic_Variance Analysis

| September 29, 2018

Lizana
Clinic uses client-visits as its measure of activity. During December, the
clinic budgeted for 4,800 client-visits, but its actual level of activity was
4,780 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:

Fixed
element
per month

Variable
element per client-visit

Revenue

$36.80

Personnel expenses

$28,800

$12.80

Medical supplies

1,700

6.80

Occupancy expenses

10,700

1.00

Administrative expenses

7,800

0.40

Total expenses

$49,000

$21.00

Actual results for December:

Revenue

$133,000

Personnel expenses

$70,040

Medical supplies

$21,016

Occupancy expenses

$14,250

Administrative expenses

$8,100

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:

$6,930 F

$7,246 F

$6,930 U

$7,246 U

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