Consider the following 2011 data for Newark General Hospital (in millions of dollars)

Static Flexible Actual Budget Budget Results Revenues $4.7 $4.8 $4.5 Cost 4.1 4.1 4.2 Profits 0.6 0.7 0.3

a. Calculate and interpret the profit variance. Profit variance = Actual profit – Static profit Answer? Interpret your Profit Variance results? b. Calculate and interpret the revenue variance. Revenue Variance = [Actual Revenues – Static Revenues] Answer? Interpret your Revenue Variance results? c. Calculate and interpret the cost variance. Cost Variance = [Static Cost – Actual Cost] Answer? Interpret your Cost Variance results? What is the net effect of the revenue and cost variance? Hint: Take the revenue +cost variance= profit variance d. Calculate and interpret the volume and price variances on the revenue side. -Volume variance = Flexible Revenues – Static Revenues Volume variance =? Interpret your Volume Variance results? -Price variance = Actual revenues-Flexible revenues Price Variance= ? Interpret your Price Variance results? e. Calculate and interpret the volume and management variances on the cost side. -Volume variance (on cost side) = Static costs – Flexible costs Volume Variance (on cost side) =? Interpret your Volume Variance results? -Management variance = Flexible costs – Actual costs Management Variance = ? Interpret your Management Variance results? f. How are the variances calculated above related?