Performance evaluation in a service industry. Centra! Valley Title Insurance Company estimates that its overhead costs tor policy administration should be $100 for each new policy obtained and $5 per year for each $1,500 face amount of insurance outstanding. The company set a budget of 5.000 new policies for the coming period.

In addition, the company estimated that the total face amount of insurance outstanding for the period would equal $12,000,000.

During the period, actual costs related to new policies amounted to $495,000. A total of 4.800 new policies were obtained.

The cost of maintaining existing policies was $55,000. Had the firm incurred these costs at the same prices as were in effect when it prepared the budget, the costs would have amounted to $60,000. However. $14,000,000 in policies were outstanding during the period.

Prepare a schedule to indicate the differences between a master production budget and actual costs for this operation.