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Managerial Accounting Exercise 2. Almana Hospital uses patient-visits as its measure of activity. The hospital has...

Managerial Accounting

Exercise 2. Almana Hospital uses patient-visits as its measure of activity. The hospital has provided the following report:

Almana Hospital
Comparison of Actual Results to Planning Budget
For the Month Ended May 31

Actual Results

Planning Budget

Flexible Budget

Variances

Patient-visits

2,000

2,300

Revenue ($36.40q)

$76,110

  $83,720

Expenses:

    Personnel expenses ($20,400 + $10.40q)

43,240

44,320

    Medical supplies ($1,100 + $6.60q)

13,990

16,280

    Occupancy expenses ($6,400 + $1.50q)

9,800

9,850

    Administrative expenses ($2,400 + $0.40q)

    3,080

    3,320

Total expense

   70,110

   73,770

Net operating income

   $6,000

  $9,950

Required:

  1. Prepare a flexible budget.
  2. Prepare a report showing the hospital's revenue and spending variances for May.
  3. Label each variance as favorable (F) or unfavorable (U). Fill in the last column of the table above.
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