Following are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars): 6.2 Simple Flexible Actual Number of surgeries Patient revenue Salary expense Nonsalary expense Profit 1,20032,6001,300 600 1,200 1,300 $2,400$2,600$2,535 $1,200 1,300$1,365 650 585 S 650 585 $ 600 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: Exam- ine the simple budget to determine the relationship of each budget line to volume.) Determine the variances for each line of the P&L statement, both in dollar terms and in percentage terms. What do the results in part b tell Brandon's managers about the center's opera- tions for the quarter? b. c.
Following are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars): 6.2 Simple Flexible Actual Number of surgeries Patient revenue Salary expense Nonsalary expense Profit 1,20032,6001,300 600 1,200 1,300 $2,400$2,600$2,535 $1,200 1,300$1,365 650 585 S 650 585 $ 600 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: Exam- ine the simple budget to determine the relationship of each budget line to volume.) Determine the variances for each line of the P&L statement, both in dollar terms and in percentage terms. What do the results in part b tell Brandon's managers about the center's opera- tions for the quarter? b. c.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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how to solve a-c?
Transcribed Image Text:Following are the budgets of Brandon Surgery Center for the most recent historical
quarter (in thousands of dollars):
6.2
Simple
Flexible
Actual
Number of surgeries
Patient revenue
Salary expense
Nonsalary expense
Profit
1,20032,6001,300
600
1,200
1,300
$2,400$2,600$2,535
$1,200 1,300$1,365
650 585
S 650 585
$ 600
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: Exam-
ine the simple budget to determine the relationship of each budget line to
volume.)
Determine the variances for each line of the P&L statement, both in dollar
terms and in percentage terms.
What do the results in part b tell Brandon's managers about the center's opera-
tions for the quarter?
b.
c.
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