apens 0.3 Refer to Carroll Clinic's 2016 operating budget, contained in exhibit 6.2. Instead . the actual results reported in exhibit 6.3, assume the following results: 6.4 A In th 1. Volume (Number of Visits) 11,000 Payer A 12,000 Payer B Total 23,000 11. Reimbursement (per Visit) Payer A $ 95 Payer B $ 95 111. Costs Variable costs: Supplies $ 350,000 Fixed costs: Labor $1,000,000 Overhead 500,000 Total $1,500,000 IV. 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 Total 1,500,000 Profit $1,850,000 $ 335,000 a. What are the profit, revenue, and cost variances based on the simple (exhibit 6.2) budget? b. Construct Carroll's flexible budget for 2016. 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 vari- ance analysis here and the Carroll Clinic illustration presented in the chapter.EXHIBIT 6.3 Simple Variance Actual Carroll Clinic Budget Dollar Results Simple Bud or Visit 1 Volume (Number of Visits) Variance Ar Payer A 9,000 10,000 1,000 11.1% Payer B 12,000 11,500 (500 (4.2) Total 21,000 21,500 500 2.4 I Reimbursement (per Visit) Payer A $100 $105 $5 5.0% Payer B $90 $85 ($5 ) (5.6) Ill. Costs Variable costs: Supplies $ 315,000 $ 320,000 ($ 5,000) (1.6%) Fixed Costs: Labor $1,035,000 $1,050,000 ($ 15,000) (1.4) Overhead 500,000 550,000 ( 50,000) (10.0) Total $1,535,000 $1,600,000 ($ 65,000) (4.2) IV. Forecasted P&L Statement Revenues: Payer A $ 900,000 $1,050,000 $150,000 16.7% Payer B 1,080,000 977,500 ( 102,500) (9.5) Total revenues $1,980,000 $2,027,500 $ 47,500 2.4 Variable costs $ 315,000 $ 320,000 ($ 5,000) (1.6) Fixed costs 1,535,000 1,600,000 ( 65,000) (4.2) Total costs $1,850,000 $1,920,000 ($ 70,000) (3.8) Profit $ 130,000 $ 107,500 ($ 22,500) (17.3) The budgeted value, in this case $2 million of profits, is often called the standard. cause that is the profit goal of the hospital (the standard to be reached) as expressed in we budget. In general variances are calculated so that positive amounts signify "good" or desirable