Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
| Fixed element per month | Variable element per client-visit | |
|---|---|---|
| Revenue | $ 0 | $ 38.20 |
| Personnel expenses | $ 33,600 | $ 11.00 |
| Medical supplies | 1,900 | 6.20 |
| Occupancy expenses | 10,200 | 1.90 |
| Administrative expenses | 6,600 | 0.30 |
| Total expenses | $ 52,300 | $ 19.40 |
Actual results for January:
| Revenue | $ 127,218 |
|---|---|
| Personnel expenses | $ 71,860 |
| Medical supplies | $ 24,058 |
| Occupancy expenses | $ 17,371 |
| Administrative expenses | $ 7,547 |
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 January would be closest to:
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$6,930 U
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$6,930 F
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$7,118 U
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$7,118 F
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