Astioy Randio - Timo Shoet
The hospital has announced the total outpatient revenue and costs for 2019. The estimates and actual numbers are different than the CEO thought they would be. Determine the estimated costs, actual costs, and both the simple dollar variance and percentage variance. Please provide the CEO with the calculation details.
Consider the following 2019 data for the hospital:
\begin{tabular}{|l|l|l|l|}
\hline & & & \\
\hline Service & Simple Budget & Flexible Budget & Actual Results \\
\hline Revenue & \( \$ 4,800,000.00 \) & \( \$ 5,000,000.00 \) & \( \$ 4,700,000.00 \) \\
\hline Costs & \( \$ 3,900,000.00 \) & \( \$ 3,900,000.00 \) & \( \$ 4,100,000.00 \) \\
\hline Profit & \( \$ 900,000.00 \) & \( \$ 1,100,000.00 \) & \( \$ \) \\
\hline
\end{tabular}
a. Calculate and interpret the two profit variances.
\[
\left.\begin{array}{l}
S=900,000.00 \\
F=1,100,000.00
\end{array}\right\}-200,000
\]
b. Calculate and interpret the two revenue variances.
\[
\begin{array}{l}
S=4,800,000\}-200,000 \\
F=5,000,000
\end{array}
\]
c. Calculate and interpret the two cost variances.
\[
\begin{array}{l}
S=3,900,000\} \\
F=3,900,000
\end{array}
\]
d. How are the variances related?