The original question is...

The Medical Center also recently negotiated with a group of employers to treat their patients based on a capitated amount of $750 per person per month. This group of employers has combined 6,525 employees. You predict that your cost will be $610 per month per person.

The budgeted revenue was initially $1,575,000.

What I have so far.....

Total amount of revenue per month is$4,893,750

Total amount of revenue per year is$58,725,000

Total profit expect per month is$913,500

Total profit expected per year is$10,962,000

Total amount of revenue per month = Number of employees* Capitation fee per person

$6,525*$750=$4,893,750

Total amount of revenue per year = total amount of revenue per month *12

$4,893,750*12=$58,725,000

Total Profit expected per month = number of employees* Capitation fee per person/cost per person

Capitation fee per person- cost per person = $750-$610=$140

(Capitation per person/ cost per person)*12=$140*12=$1,680

Total profit expected per month is $6,525*$140=$913,500

Total profit expected per year is = total profit expected per month *12

$913,500*12

=10,962,000

What I need help with......

Comparing it to budgeted revenue. I need help understanding the reasoning behind budget variances.