A) calculate and interpret the profit variance. B) calculate and interpret the revenue variance. C) calculate and interpret the cost variance. D) calculate and interpret thevolume and management variances on the cost side. E) calculate and interpret thevolume and price variances on the revenue side. F)how are the variances calculated above related? 8.2 Here are the 2007 revenues for the Wendover Group Practice Association for four different budgets, in thousands of dollars:

static budget $425, Flexible(enrollment/utilization)budget $200, flexible(enrollment)budget $180, Actual results $300

a. What does the budget data tell you about the nature of Wendover’s patients: Are they capitated or fee-for-service? b. Calculate and interpret the following variances: o Revenue variance o Volume variance o Price variance o Enrollment variance o Utilization variance

8.3 Here are the budgets of Brandon Surgery Center for the most recent historical quarter, in thousands of dollars: static number of surgeries 1,200 patient revenue $2,400 salary 1,200 non-salary expense600 profit $600 flexible number of surgeries 1,300 patient revenue $2,600 salary 1,300 non-salary expense650 profit $650 actual number of surgeries 1,300 patient revenue $2,535 salary 1,365 non-salary expense 585 profit $585

The 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. (Hint: Examine the static budget to determine the relationship of each budget line to volume.) b. Determine the variances for each line of the profit and loss statement, both in dollar terms and in percentage terms. (Hint: Each line has a total variance, a volume variance, and a management variance.) c. What do the Part b results tell Brandon’s managers about the surgery center’s operations for the quarter?