Consider the fallowing 2020 data for Queens General Hospital (in millions of dollars): Simple Flexible Actual Budget Budget Results Revenues $5.7 $3.8 $4.5 Cost 4.8 3.1 4.2 Profit 0.9 0.8 0.3 Calculate and interpret the two profit variances. Calculate and interpret the two revenue variances. Calculate and interpret the two cost variances. How are variances related?
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.
1 Consider the fallowing 2020 data for Queens General Hospital (in millions of dollars):
Simple Flexible Actual
Budget Budget Results
Revenues $5.7 $3.8 $4.5
Cost 4.8 3.1 4.2
Profit 0.9 0.8 0.3
- Calculate and interpret the two profit variances.
- Calculate and interpret the two revenue variances.
- Calculate and interpret the two cost variances.
- How are variances related?
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