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Consider the following 2007 data for Newark General Hospital (in millions of dollars):
Static Budget Flexible Budget Actual 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 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 variances on the cost side
f) How are the variances calculated above related?
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