Fallowing are the budgets of The Bronx Surgery Center for the most recent historical quarter (in thousands of dollars):

Simple Flexible Actual

Number of Surgery 1,800 1,300 1,300

Patient Revenue $3,400 $2,200 $3,535

Salary Expense $1,900 $1,100 $1,165

Nonsalary Expense $800 $650 $585

Profit $800 $650 $585

The center assumes that all revenues and cost are variable and hence tied directly to patient volume.

1. 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.

2. Determines the variance for each line of the P&L statement, both in dollar terms and percentage terms.

3. What do the results in part b tell The Bronx Surgery Centers managers about the centers operations for quarter?