Complete all parts (a-d) of End-of-Chapter Problem 6.1 from Chapter 6 (page 184). Use an Excel spreadsheet to conduct variance analysis only for the Simple Budget versus the Actual Results. Show all work, including formulas for all calculations in Excel.

6.1 Consider the following 2008 data for Newark General Hospital (in millions of dollars):

Simple Buget Flexible Budget Actual Budget

Revenues $4.7 $4.8 $4.5

Costs 4.1 4.1 4.2

Profit 0.6 0.7 0.3

a. Calculate and interpret the two profit variances.

b. Calculate and interpret the two revenue variances.

c. Calculate and interpret the two cost variances.

d. How are the variances related?