Student Finance (StuFi) is a start-up 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. StuFi's rev- enue model is to take an upfront fee of 40 basis points (0.40%) eachfrom the alumni investor and the student borrower for every loan originated on its platform. StuFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. StuFii's budgeted and actual results for the third quarter of 2017 are presented below. Home Insert Page Layout Formulas Data View Review в Static Budget Actual Results 1. New loans originated Average amount of loan Variable costs per loan: 8,200 10,250 2. $145,000 $162,000 4 $475 (9.5 hrs at $50 per hour) $360 (8 hrs at $45 per hour) Professional labor Credit verification $100 $100 6. Federal documentation fees $120 $125 Courier services Administrative costs (fixed) 10 Technology costs (fixed) $50 $800,000 $54 $945,000 9. $1,300,000 $1,415,000

Student Finance (StuFi) is a start-up 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. StuFi's rev- enue model is to take an upfront fee of 40 basis points (0.40%) eachfrom the alumni investor and the student borrower for every loan originated on its platform. StuFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. StuFii's budgeted and actual results for the third quarter of 2017 are presented below. Home Insert Page Layout Formulas Data View Review в Static Budget Actual Results 1. New loans originated Average amount of loan Variable costs per loan: 8,200 10,250 2. $145,000 $162,000 4 $475 (9.5 hrs at $50 per hour) $360 (8 hrs at $45 per hour) Professional labor Credit verification $100 $100 6. Federal documentation fees $120 $125 Courier services Administrative costs (fixed) 10 Technology costs (fixed) $50 $800,000 $54 $945,000 9. $1,300,000 $1,415,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Question

Q.Prepare StuFi’s static budget of operating income for the third quarter of 2017.

Student Finance (StuFi) is a start-up 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. StuFi's rev-
enue model is to take an upfront fee of 40 basis points (0.40%) eachfrom the alumni investor and the student
borrower for every loan originated on its platform.
StuFi hopes to go public in the near future and is keen to ensure that its financial results are in line with
that ambition. StuFii's budgeted and actual results for the third quarter of 2017 are presented below.
Home
Insert
Page Layout
Formulas
Data
View
Review
в
Static Budget
Actual Results
1.
New loans originated
Average amount of loan
Variable costs per loan:
8,200
10,250
2.
$145,000
$162,000
4
$475 (9.5 hrs at $50 per hour)
$360 (8 hrs at $45 per hour)
Professional labor
Credit verification
$100
$100
6.
Federal documentation fees
$120
$125
Courier services
Administrative costs (fixed)
10 Technology costs (fixed)
$50
$800,000
$54
$945,000
9.
$1,300,000
$1,415,000

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Diane Buswell is preparing the 2022 budget for one of Current Designs' rotomolded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2022. Quarter 1 1,300 kayaks Quarter 2 2,000 kayaks Quarter 3 950 kayaks Quarter 4 950 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 25% of the next quarter's anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 2,000 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 325 rotomolded kayaks. Production of each kayak requires 44 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 20% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2021, is 21,800…
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