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F. Naz
F. Naz, Chartered Accountant
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8.1 Consider the following 2007 data for Newark General Hospital

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8.1 Consider the following 2007 data for Newark General Hospital (in millions of dollars):
Static Budget Flexible Budget Actual Results

Revenues $4.7 $4.8 $4.5

Costs 4.1 4.1 4.2

Profits 0.6 0.7 0.3

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 the volume and price variances on the revenue
e Calculate and interpret the volume and management variances on the
cost side
f How are the variances calculated above related?

8.2 Here are the 2007revenuesfor the Wendover Group Practice Association
for four different budgets, in thousands of dollars
Static Budget Flexible(Enrollment/Utilization budget) Flexible (Enrollment) Budget Actual Results
$425 $200 $180 $300
a What does the budget data tell you about the nature of Wendover’s
patients: Are they capitated or fee-for-service? (Hint: See the note to
Figure 8.2
b Calculate and interpret the following variances
Revenue variance
Volume variance
Price variance

Enrollment 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 Actual

Number of Surgeries 1,200 1,300 1,300

Patient revenue $2,400 $2,600 $2,535

Salary expense 1,200 1,300 1,365

Non-salary expense 600 650 585

Profit $ 600 $ 650 $ 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?

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Customer: replied 3 years ago.



Thank you for your help. I requested help with more questions, and I need help ASAP! can you help please


I have gone through the data for your posted question starting with number 2 and ending with number 14. Please clarify what should be the lenght of descriptive answer, specially for last three questions, and also mention your deadline, thanks.