Refer to Problem 8.4. Assume the results reported in that problem hold, except that a difference existed among budgeted, static enrollment and realized enrollment. The corrected results are:
a. Construct Carrollâ€™s flexible budgets for 2004. (Hint: Because of a change in enrollment, creating three flexible budgets is necessary. See the note to Table 8.7.)
b. What are the profit variance, revenue variance, and cost variance?
c. Focus on the revenue side. What is the volume variance? The price variance? Break the volume variance into enrollment and utilization components. How does your answer here differ from your corresponding answer to Problem 8.4.
d. Now consider the cost side. What are the volume and management varances? Break down the management variance into labor, supplies, and fixed costs variances.
e. Break down the labor variance into rate and efficiency components.
f. Break down the supplies variance into price and usage components.
g. Interpret your results. In particular, focus on the differences between the variance analysis here and the one in Problem 8.4.