Cassen Realtors, Inc., specializes in the sale of residential properties. It earns its revenue by charging a percentage of the sales price. Commissions for sales persons, listing agents, and listing companies are its main costs. Business has improved steadily over the last 10 years. Bonnie Cassen, the managing partner of Cassen Realtors, receives a report summarizing the company's performance each year. The report for the most recet year appears below.

Cassen Realtors , Inc Performance Report for the Year ended December 31

		Budgeted		Actual		Difference Under (Over) Budget
Total Selling Fees		$2,052,000		$2,242,200		($190,200)
Variable costs
Sales commissons		$1,102,950		$1,205,183		($102,233)
Automobile		36,000		39,560		-3,560
Advertising		93,600		103,450		-9,850
Home repairs		77,400		89,240		-11,840
General overhead		656,100		716,970		-60,870
		$1,966,050		$2,154,403		-188,353
Fixed costs
General overhead		60,000		62,300		-2,300
Total costs		$2,026,050		$2,216,703		$190,653
Operating income		$25,950		$25,497		$453

1. Anaylze the performance report. What does it say about the company's performance? Is the performance report reliable? Explain your answer.

2. Calculate the budgeted selling fee and budgeted variable costs per home sale.

3. Prepare a performance report using a flexible budget based on the actual number of home sales.

4. Analyze the report you prepared in requirement 3. What does it say about the company's performance? Is the report reliable? Explain your answer.

5. What recommendations would you make to improve the company's performance next year?