Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month’s rent of $700. Budgeted cost data per tenant application for 2022 follow: Professional labor: 1.5 hours at $20.00 per hour Credit checks: $50.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,000 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month’s rent of $700. Budgeted cost data per tenant application for 2022 follow:
- Professional labor: 1.5 hours at $20.00 per hour
- Credit checks: $50.00
Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,000 per month. On average, Phoenix is successful in placing one tenant for every three applicants.
Actual rental applications in August 2022 were 270. Phoenix paid $9,500 for 400 hours of professional labor. Credit checks went up to $55 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,600. The average first monthly rentals for August 2022 were $800 per apartment unit for 90 units.
Part 1 (Static)
Required:
1. (a) What is the master
| Questions | $ | Favourable/Unfavourable | |
| 1a | master budget variance | ? | Favourable |
| 1b | total flexible budget variance | ? | Favourable |
| 1c | sales volume variance | ? | Unfavourable |
| 2 | direct labour rate variance | 1500 | Unfavourable |
| direct labour efficiency variance | -100 | Favourable |
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