Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 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 $ 0 $40.00 Personnel expenses $32,400 $13.40 Medical supplies 1,500 4.80 Occupancy expenses 9,100 2.10 Administrative expenses 6,700 0.40 Total expenses $49,700 $20.70 Actual results for December: Revenue $134,170 Personnel expenses $ 80,776 Medical supplies $ 17,302 Occupancy expenses $ 15,754 Administrative expenses $ 8,296 The net operating income in the flexible budget for December would be closest to: $13,990 $11,898 $14,762 $12,188
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.
Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 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 | $ 0 | $40.00 |
| Personnel expenses | $32,400 | $13.40 |
| Medical supplies | 1,500 | 4.80 |
| Occupancy expenses | 9,100 | 2.10 |
| Administrative expenses | 6,700 | 0.40 |
| Total expenses | $49,700 | $20.70 |
Actual results for December:
| Revenue | $134,170 |
|---|---|
| Personnel expenses | $ 80,776 |
| Medical supplies | $ 17,302 |
| Occupancy expenses | $ 15,754 |
| Administrative expenses | $ 8,296 |
The net operating income in the flexible budget for December would be closest to:
|
$13,990
|
||
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$11,898
|
||
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$14,762
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||
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$12,188
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