1-Why are planning and budgeting so important to an organizations success?
2-Briefly describe the planning process. Be sure to include summaries of the strategic, operating and financial plans.
3-Describe the components of a financial plan.
Consider the following hospital data:
Static budget Flexible Budget Actual results
Revenues $4.7 $4.8 $4.1
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 variance 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?
Details of budgeting and planning processes, different types of plans and calculations for different types of variances are given in a Word attachment.