E7-33 (similar to) Question Help Education Finance (EduFi) 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. Edu Fi'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 ils platform. EduFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. EduFi's budgeted and actual results for the third quarter of 2017 are presented below (Click the icon to view the data.) Read the requirements. S 9,563,200 Contribution margin 760,000 Fixed acministrative costs 1.100,000 Fixed technolcgy costs S 7,703,200 Operating income Requirement 2. Prepare an analysis of variances for the third quarter of 2017; identify the sales volume and flexible budget variances for operating income. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Do not round intermediary calculations. Round the amount entered into the input cell to the nearest whole dollar.) Sales Flexible Requirement Actual Budget Flexible Volume Static Results Variances Budget Variances Budget 11,640 11,640 Loans 1. Prepare EduFi's static budget of operating income for the third quarter of 20,672,640 S 23,745,600 $ 3,072,960 F $ 2017 Revenues 2. Prepare an analysis of variances for the third quarter of 2017; identily 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 4. What factors would you consider in evaluating the effectiveness of professional labor in the third quarter of 2017? Variable costs: 4,865,520 1,094,160 U 3,771,360 Professional labor 1,280,400 1.280,400 Credit varification 58,200 U 1,746,000 1,687,800 Federal doc fees 11,840 U 1,001,040 989,400 Courier services S 8,892,960 $ 1,164,000 $ 7,728,980 Total variable costs Print Done Choose from any list or enter any number in the input fields and then click Check Answer. Data Table Static Budget Actual Results New loans originated 11,640 8,600 $ $170,000 Average amount of loan 148,000 Variable costs per loan 418 (11 hrs at $38 per hour) 324 (9 hrs at $36 per hour) Professional labor $ Credit verification 110 110 Federal documentation fees 145 150 $ $ Courier services 85 86 Administrative costs (fixed) 760,000 896,000 1,100,000 Technology costs (fixed) 1,206,000 Done Print EA
