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.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 4TIF: Evaluating the budgeting system in a service company Childrens Hospital of the Kings Daughters...

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