The controller of Conrad Aiken Surgical Center was reviewing monthly financial reports and noted some differences. The center had fallen 8 short of its plan to perform 450 procedures during the month. Despite that shortfall, surgical revenue exceeded the $830,250 budget, coming in at $848,640. 1. Construct the flexible budget estimate for revenue, procedures, and revenue per procedure. Budgeted Flexible Actual A. Revenue 830,250 848,640 B. Procedures 450 442 C. Revenue per procedure $1,845 $1,920 2. Calculate the revenue volume variance. 3. Calculate the revenue rate variance . 4. Is the unfavorable variance caused by volume or by the rate?
The controller of Conrad Aiken Surgical Center was reviewing monthly financial reports and noted some differences. The center had fallen 8 short of its plan to perform 450 procedures during the month. Despite that shortfall, surgical revenue exceeded the $830,250 budget, coming in at $848,640. 1. Construct the flexible budget estimate for revenue, procedures, and revenue per procedure. Budgeted Flexible Actual A. Revenue 830,250 848,640 B. Procedures 450 442 C. Revenue per procedure $1,845 $1,920 2. Calculate the revenue volume variance. 3. Calculate the revenue rate variance . 4. Is the unfavorable variance caused by volume or by the rate?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The controller of Conrad Aiken Surgical Center was reviewing monthly financial reports and noted some differences. The center had fallen 8 short of its plan to perform 450 procedures during the month. Despite that shortfall, surgical revenue exceeded the $830,250 budget, coming in at $848,640.
1. Construct the flexible budget estimate for revenue, procedures, and revenue per procedure.
| Budgeted | Flexible | Actual | |||||
| A. | Revenue | 830,250 | 848,640 | ||||
| B. | Procedures |
450 |
442 | ||||
| C. | Revenue per procedure | $1,845 | $1,920 |
2. Calculate the revenue volume variance.
3. Calculate the revenue rate variance .
4. Is the unfavorable variance caused by volume or by the rate? Enter VOLUME or RATE as your answer.
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