Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,260 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Fixed element per month Variable element per client-visit Revenue $ 0 $ 54.70 Personnel expenses $ 29,800 $ 20.50 Medical supplies 760 9.30 Occupancy expenses 7,160 2.60 Administrative expenses 4,860 0.70 Total expenses $ 42,580 $ 33.10 Actual results for November: Revenue $ 121,589 Personnel expenses $ 66,865 Medical supplies $ 19,823 Occupancy expenses $ 11,570 Administrative expenses $ 5,659 The personnel expenses in the planning budget for November would be closest to:

Keisker Clinic

The personnel expenses in the planning budget for November would be closest to:

= $76,130

Explanation:

a) Data and Calculations:

Estimated client visits = 2,260

Actual client visits = 2,250

Budgeting Data:

                                     Fixed element           Variable element

                                        per month                 per client-visit

Revenue                                    $ 0                    $ 54.70

Personnel expenses        $ 29,800                  $ 20.50

Medical supplies                       760                        9.30

Occupancy expenses             7,160                       2.60

Administrative expenses      4,860                        0.70

Total expenses                $ 42,580                   $ 33.10

Actual results for November:

Revenue                                       $ 121,589

Personnel expenses                    $ 66,865

Medical supplies                           $ 19,823

Occupancy expenses                    $ 11,570

Administrative expenses               $ 5,659

Total                                            $225,506

The personnel expenses in the planning budget for November would be closest to:

=  $ 29,800 + ($ 20.50 * 2,260) = $76,130

This amount is based on the estimated or budgeted client-visits and not the actual client-visits for the month.

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