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    Newark General Hospital

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    Consider the following 2011 data for Newark General Hospital (in millions of dollars):

    Static Flexible Actual
    Budget Budget Result
    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 profit variance.

    B). Calculate and interpret the revenue variance

    C). Calculate and interpret the cost variance

    D).Calculate and interpret the volume and price variances on the revenue side

    E).Calculate and interpret the volume and management variance on the cost side.

    F). How are the variances calculated above related?

    please see pictures that have been uploaded

    8.4 Refer to Carroll Clinic's 2011 operating budget contained in Exhibit 8.3. Instead of the actual results reported in Exhibit 8.4, assume reported below:

    A). Construct Carroll's Flexible budget for 2011.

    B). what are the profit variance, revenue variance, and cost variance?

    C). Consider the revenue variance. What is the component volume variance? The price variance?

    D). Break down the cost variance into volume and management components.

    E). Break down the management variance into labor, supplies, and fixed cost's variances.

    F). Interpret your results. In particular, focus on the differences between the variances analysis here and the Carroll Clinic illustration presented in the Chapter.

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    Solution Summary

    Newark General Hospital budgeting costs are examined. The response addresses the query is attached in Excel File.