Flexible budget preparation, service sector (23 marks) For You Ltd. helps prospective homeowners of substantial means to find low-cost financing and assists existing homeowners in refinancing their current loans at lower interest rates. For You works only for customers with excellent borrowing potential. Hence, For Youl is able to obtain a loan for every customer with whom it decides to work. For You charges clients 2.3% of the loan amount it arranges. In 2013, the average loan amount per customer was 55000. In 2014, the average loan amount was 75 500. In its 2015 flexible budgeting system, For You assumes the average loan amount will be 70 000. Budgeted cost data per loan application for 2015 are: Professional labour: 4 budgeted hours at a budgeted rate of 23 per hour Loan filing fees: budgeted at 88 per loan application Credit checks: budgeted at 134 per loan application Courier mailings: budgeted at 57 per loan application. Office support (the costs of leases, secretarial workers and others) is budgeted to be 25 750 per month. For You Ltd. views this amount as a fixed cost. Required 1 Prepare a static budget for November 2015 assuming 50 loan applications at first, and for 75 loan applications then. (4,5 marks) 2 Actual loan applications in November 2015 were 75. Other actual data for November 2015 were: Professional labour: 6.3 hours per loan application at 30 per hour Loan filing fees: 100 per loan application Credit checks: 134 per loan application Courier mailings: 49 per loan application. Office support costs for November 2015 were 100 000. The average loan amount for November 2015 was 87 000. For You received its 3.2% fee on all loans. Prepare a Level 2 variance analysis (flexbile budget variance for sales and expenses and sales volume variance) of For You Ltd. for November 2015. For You's output measure in its flexible budgeting system is the number of loan applications. Provide an extended explanation of the results. (15,5 marks) 3 Calculate professional labour price and efficiency variances for November 2015. (Calculate labour price on a per-hour basis.)