Chelsea Clinic’s static budget, flexible budget and actual expense information for 2018 is listed below. Based on this information, calculate profit variance based on the flexed budget.

Assumptions: Static Budget Flexible Budget Actual Results
Blue Cross Visits 36,000 40,000 40,000
Highmark Visits 54,000 60,000 60,000
Total Visits 90,000 100,000 100,000
Revenues
Blue Cross $ 900,000 $ 1,000,000 $ 1,120,000
Highmark $ 1,080,000 $ 1,200,000 $ 1,080,000
Total $ 1,980,000 $ 2,200,000 $ 2,200,000
Costs
Variable:
Labor $ 1,200,000 $ 1,333,333 $ 1,400,000
Supplies $ 150,000 $ 166,667 $ 225,000
Total Variable $ 1,350,000 $ 1,500,000 $ 1,625,000
Fixed Costs $ 500,000 $ 500,000 $ 500,000
Total Costs $ 1,850,000 $ 2,000,000 $ 2,125,000
Profit $ 130,000 $ 200,000 $ 75,000

Answer rating: 100% (QA)

To calculate the profit variance based on the flexed budget we need to compare the actual profit ... View the full answer