$1.$ Explain why actual net income is $$2\mathrm{.}081$ million under budget.

$2.$Create the preliminary flexible budgets for inpatient and outpatient areas based on $12,200$ forecasted discharges and $611,072$ outpatient encounters and the inflation factors used in the rejected incremental budget $($Table $33\mathrm{.}1).$ After the flexible budgets are created, roll them up with the other revenue estimate from Table $33\mathrm{.}1$ to create the master budget for Barton.

$3.$Compare the preliminary flexible budget with the initial incremental budget and explain the major changes.