Static Budget Actual Results New loans originated 8,000 11,040 Average amount of loan 2$ 152,000 $173,000 Variable costs per loan Professional labor 2$ 539 (11 hrs at $49 per hour) 2$ 684 (12 hrs at $57 per hour) Credit verification 2$ 95 2$ 95 Federal documentation fees $ 140 2$ 143 Courier services 2$ 75 2$ 79 Administrative costs (fixed) 2$ 750,000 $ 874,000 Technology costs (fixed) $ 940,000 $ 1,050,000 %24
Static Budget Actual Results New loans originated 8,000 11,040 Average amount of loan 2$ 152,000 $173,000 Variable costs per loan Professional labor 2$ 539 (11 hrs at $49 per hour) 2$ 684 (12 hrs at $57 per hour) Credit verification 2$ 95 2$ 95 Federal documentation fees $ 140 2$ 143 Courier services 2$ 75 2$ 79 Administrative costs (fixed) 2$ 750,000 $ 874,000 Technology costs (fixed) $ 940,000 $ 1,050,000 %24
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
GradFi is a startup that aims to use the power of social communities to transform the student loan market. It connects participants through a dedicated lending pool, enabling current students to borrow from a school's alumni community. GradFi's revenue model is to take an upfront fee of 60 basis points (0.60%) each from the alumni investor and the student borrower for every loan originated on its platform. GradFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. GradFi's budgeted and actual results for the third quarter of 2017 are presented below.
Transcribed Image Text:1. Prepare GradFi's static budget of operating income for the third quarter of
2017.
2. Prepare an analysis of variances for the third quarter of 2017; identify the
sales volume and flexible budget variances for operating income.
3. Compute the professional labor price and efficiency variances for the third
quarter of 2017.
Transcribed Image Text:Data Table
Static Budget
Actual Results
New loans originated
8,000
11,040
Average amount of loan
$
152,000
$173,000
Variable costs per loan
Professional labor
$
539 (11 hrs at $49 per hour)
2$
684 (12 hrs at $57 per hour)
Credit verification
2$
95
2$
95
Federal documentation fees
$
140
2$
143
Courier services
$
75
2$
79
Administrative costs (fixed)
$
750,000
2$
874,000
Technology costs (fixed)
940,000
1,050,000
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