6.4 Again refer to Carroll Clinics 2012 operating budget, contained in Exhibit 6.2. Instead of the actual results reported in Exhibit 6.3 or listed in Problem 6.3, assume these results:

I. Volume (Number of Visits)	Payer A 8,500 Payer B 11,000 Total 19,500
II. Reimbursement (per Visit)	Payer A $90 Payer B $80
III. Costs	Variable Costs: Supplies $320,000	Fixed Costs: Labor $1,050,000 Overhead $550,000 Total $1,600,000
IV. Forecasted P&L Statement	Revenues: Payer A $765,000 Payer B $880,000 Total Revenues $1,645,000	Variable Costs $320,000 Fixed Costs $1,600,000 Total $1,920,000	Profit $275,000

a. What are the profit, revenue, and cost variances based on the simple (Exhibit 6.2) budget?

b. Construct Carrolls flexible budget for 2012.

c. What are the profit, revenue, and cost variances based on the flexible budget?

d. Interpret your results. In particular, focus on the differences between the variance analysis here and the Carroll Clinic illustration presented in the chapter and in problem 6.3.

Problem 6.3 (Useful for question "D")

I. Volume (Number of Visits)	Payer A 11,000 Payer B 12,000 Total 23,000
II. Reimbursement (per Visit)	Payer A $95 Payer B $95
III. Costs	Variable Costs: Supplies $350,000	Fixed Costs: Labor $1,000,000 Overhead $500,000 Total $1,500,000
IV. Forecasted P&L Statement	Revenues: Payer A $1,045,000 Payer B $1,140,000 Total Revenues $2,185,000	Variable Costs $350,000 Fixed Costs $1,500,000 Total $1,850,000	Profit $335,000

Please show work. Thank You!

Chapter 6: Pl an ning and Budgetin g 1 7 3 EXHIBIT 6.2 Carroll Clinic: 20 Operating Budg I. Volume (Number of Visits) Payer A Payer B Total 9,000 12,000 21,000 II. Reimbursement (Per Visit) Payer A Payer B $10o 90 III. Cost.s Variable Costs: Supplies $315,000 Fixed Costs: Labor Overhead Total $1,035,000 500,000 $1,535,000 IV Forecasted P&L Statement Revenues: Payer A Payer B $900,000 1,080,00o $1,980,000o $ 315,00o 1,535,000 $1,850,00o $130,00o Total revenues Variable costs Fixed costs Total costs Profit