The following budget of Acumen Surgery Center reflects
the most recent historical quarter (in thousands of
dollars):
Simple
Flexible
Actual
Number of Surgery
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 cost are
variable and hence tied directly to patient
volume.
Explain how each amount in the flexible budget was
calculated. (hint: examine the simple budget to determine the
relationship of each budget line to volume.
Determines the variance for each line of the P&L
statement, both in dollar terms and percentage
terms.
What do the results in part b tell The Bronx Surgery
Center’s managers about the center’s operations for
quarter?
