6.2 Following are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars):

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 simple budget to determine the relationship of each budget line to volume.)

b.Determine the variances for each line of the P&L statement, both in dollar terms and in percentage terms.

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

\begin{tabular}{lrrr} & Simple & Flexible & Actual \\ \hline 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 \\ Nonsalary expense & $600 & $650 & $585 \\ Profit & $600 & $650 & $585 \end{tabular}