8.1 Consider the following 2007 data for Newa

8.1 Consider the following 2007 data for Newa

8.1 Consider the following 2007 data for Newark General Hospital (in millions of dollars):Static Flexible ActualBudget Budget ResultRevenues $4.7 $4.8 $4.5Cost 4.1 4.1 4.2Profits 0.6 0.7 0.3a Calculate and interpret the profit varianceb Calculate and interpret the revenue variancec Calculate and interpret the cost varianced Calculate and interpret the volume and price variances on the 8.2 Here are the 2007 revenues for the Wendover Group Practice Association for four different budgets, in thousands of dollars:Flexible FlexibleStatic (Enrollment/Utilization) (Enrollment) ActualBudget Budget Budget Results$425 $200 $180 $300 a What does the budget data tell you about the nature of Wendovers patients: Are they capitated or fee-for-service?b Calculate and interpret the following variancesRevenue varianceVolume variancePrice varianceEnrollment variance Utilization variance 8.3 Here are the budgets of Brandon Surgery Center for the most recent historical quarter, in thousands of dollars:Static Flexible ActualNumber of Surgeries 1,200 1,300 1,300Patient Revenue $2,400 $2,600 $2,535Salary Expense 1,200 1,300 1,365Non-Salary Expense 600 650 585Profit $600 $650 $585The center assumes that all revenues and costs are variable and hence tied directly to patient volume.a Explain how each amount in the flexible budget was calculated.b Determine the variances for each line of the profit and loss statement, both in dollar terms and in percentage termsc What do the Part b results tell Brandons managers about the surgery centers operations for the quarter?


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