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7:29 ull? Aa a D d. How are the variances related? 6.2 Following are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars): Flexible Actual Number of surgeries Patient revenue Salary expense Nonsalary expense Profit Simple 1,200 $2,400 $1,200 $ 600 $ 600 1,300 $2,600 $1,300 $ 650 $ 650 1,300 $2,535 $1,365 $ 585 $ 585 The center assumes that all revenues and costs are variable 7:30 Aa Q 6.3 Refer to Carroll Clinic's 2016 operating budget, contained in exhibit 6.2. Instead of the actual results reported in exhibit 6.3, assume the following results: 11,000 12,000 33,000 $95 $95 $ 350,000 1. Volume (Number of Visits) Payer A Payer B Total II. Reimbursement (per Visit) Payer A Payer B III. Costs Variable costs: Supplies Fixed costs: Labor Overhead Total IV. P&L Statement Revenues: Payer A Payer B Total revenues Variable costs Fixed costs Total $1,000,000 500,000 $1,500,000 $1,045,000 1,140,000 $2,185,000 $ 350,000 1,500,000 $1,850,000 181 DO 3 A Reader Contents Notebook Bookmarks 7:30 $95 $95 Aa 10 QD Payer A Payer B III. Costs Variable costs: Supplies $ 350,000 Fixed costs: Labor $1,000,000 Overhead 500,000 Total $1,500,000 IV. P&L Statement Revenues: Payer A $1,045,000 Payer B 1,140,000 Total revenues $2,185,000 Variable costs $ 350,000 Fixed costs 1,500,000 Total $1,850,000 Profit $ 335,000 a. What are the profit, revenue, and cost variances based on the simple (exhibit 6.2) budget? b. Construct Carroll's flexible budget for 2016. c. What are the profit, revenue, and cost variances based on the flexible budget? d. Interpret your results. In particular, focus on the differences between the variance analysis here and the Carroll Clinic illustration presented in the chapter. 181 DO 3 Reader Contents Notebook Bookmarks

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