### Madison General Hospital 2019 Financial DataThe following table presents the financial data for Madison General Hospital for the year 2019. The figures are expressed in millions of dollars and are organized into three categories: Static Budget, Flexible Budget, and Actual Results.| | 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 |#### Profit Variance CalculationTo calculate the profit variance, compare the profits from the Flexible Budget and the Actual Results:- **Flexible Budget Profit**: $0.7 million- **Actual Results Profit**: $0.3 million**Profit Variance** = Flexible Budget Profit - Actual Results Profit= $0.7 million - $0.3 million= $0.4 millionThe profit variance is $0.4 million.

Variance is defined as the degree of variability; it is the difference between the actual and the…

Consider the following 2019 data for Madison General Hospital (in millions of dollars): Revenues Costs Profits Static Budget $4.7 $4.1 $0.6 Calculate the profit variance. Flexible Budget $4.8 $4.1 $0.7 Actual Results $4.5 $4.2 $0.3

Consider the following 2019 data for Madison General Hospital (in millions of dollars): Revenues Costs Profits Static Budget $4.7 $4.1 $0.6 Calculate the profit variance. Flexible Budget $4.8 $4.1 $0.7 Actual Results $4.5 $4.2 $0.3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Budgeted Income Statement

Accounting is the process of recording business-related financial transactions. The process of accounting involves summarizing and analyzing the transactions. The financial statements which are prepared in accounting contain a summary of the various transactions that took place within a certain accounting period. Book-keeping or accounting is one of the most important activities of any business.

Question

### Madison General Hospital 2019 Financial Data

The following table presents the financial data for Madison General Hospital for the year 2019. The figures are expressed in millions of dollars and are organized into three categories: Static Budget, Flexible Budget, and Actual Results.

| | 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 |

#### Profit Variance Calculation

To calculate the profit variance, compare the profits from the Flexible Budget and the Actual Results:

- **Flexible Budget Profit**: $0.7 million
- **Actual Results Profit**: $0.3 million

**Profit Variance** = Flexible Budget Profit - Actual Results Profit
= $0.7 million - $0.3 million
= $0.4 million

The profit variance is $0.4 million.

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