Consider the following 2007 data for Newark General Hospital (in millions of dol

Question

Consider the following 2007 data for Newark General Hospital (in millions of dollars):

                                 Simple Flexible     Actual
                                 Budget   Budget     Results

Revenues                  $4.7         $4.8        $4.5
Costs                           4.1           4.1          4.2
Profits                         0.6          0.7          0.3

a. Calculate and interpret the two profit variances.
b. Calculate and interpret the two revenue variances.
c. Calculate and interpret the two cost variances.
d. Calculate and interpret the volume and price variances on the revenue side.
e. Calculate and interpret the volume and management variances on the cost side.
f. How are the variances calculated above related?

Explanation / Answer

A. 300,000.00

B. (200,000.00)

C. (100,000)

D. 100,000.00 and (300,000.00)

E. 0 and (100,000.00)

F. I have no clue

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