Goodwill Management Inc. (GMI) is in the business of helpingrental property owners find renters and charges the
Question:
Goodwill Management Inc. (GMI) is in the business of helpingrental property owners find renters and charges the owners one-half of the first month's rent for this service. For September 2021, GMI expects to find renters for 100 apartments with an average first month's rent of $920. Budgeted cost data per tenant application for 2021follow:
- Professional labor: 1.5 hours at $20.00 per hour
- Credit checks: $61.00
GMI expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $4,100 per month. On average, GMI is successful in placing one tenant for every three applicants.
Actual rental applications in September 2021were 270. GMI paid $8,700 for 390 hours of professional labor. Credit checks went up to $66 per application. Other costs in September 2021(lease, secretarial help, and utilities) were $4,700. The average first monthly rentals for September 2021were $1,020 per apartment unit for 90 units.
Required:
1. (a) What is the total operating income variance for September 2021? (b) What is the total flexible-budget variance for the month? (c) What is the sales volume variance for the month?
2. Determine the professional labor rate and labor efficiency variances for September 2021.