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

	simple	flexible	actual
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

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?