Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,650 client-visits, but its actual level of activity was 3,590 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per monthVariable element per client-visit Revenue - $39.90 Personnel expenses$35,900 $11.10 Medical supplies 1,900 7.90 Occupancy expenses 8,900 1.90 Administrative expenses 5,900 0.10 Total expenses$52,600 $21.00 The activity variance for administrative expenses in July would be closest to: Multiple Choice $66 F $6 U $66 U $6 F

$666 Favorable

Explanation:

The computation of Activity variance is shown below:-

For computing the activity variance first we need to compute the Planning budget and flexible budget

Planning budget = $35,900 + $11.10 × 3,650

= $76,415

Flexible budget = $35,900 + $11.10 × 3,590

= $75,749

Activity variable = Activity variance - Flexible budget  

= $76,415 - $75,749

= $666 Favorable

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