Reference no: EM13481812

Static	Flexible	Actual
number of surgeries	1,200	1,300	1,300
patient revenue	$2,400	$2,600	$2,535
salary expense	1,200	1,300	1,365
non-salary expense	600	650	585
profit	$ 600	$650	$585

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 examine the static budge to determine the relationship of the each budge line to volume).

b. Determine the variances for each line of the profit and loss statement, both in dollar terms and in percentage terms.

(hint: each line has a total variance, a volume variance, and a management variance).

c. What do the Part b results tell Brandon's managers about the surgery center's operations for the quarter?