Graduate Finance (GradFi) 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. GradFi's revenue model is to take an upfront fee of 50 basis points (0.50%) each from the alumni investor and the student borrower for every loan originated on its platform. GradFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. GradFi's budgeted and actual results for the third quarter of 2017 are presented below. B: (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare GradFi's static budget of operating income for the third quarter of 2017. (Do not round intermediary calculations. Round the amount you enter into the input cell to the nearest whole dollar.) i Data Table Graduate Finance Static Budget 2017 Loans Static Budget Actual Results Revenues Variable costs: New loans originated 7,800 149,000 9,810 $164,000 Professional labor Average amount of loan Variable costs per loan Credit verification Federal doc fees Professional labor $ 368 (8 hrs at $46 per hour) 102 Courier services 459 (9 hrs at $51 per hour) 102 152 145 Total variable costs Credit verification Federal documentation fees Courier services Administrative costs (fixed) Technology costs (fixed) Contribution margin Fixed administrative costs 85 770,000 1,500,000 $ $ 917,000 1,608,000 $ Fixed technology costs Operating income Requirement 1. Prepare GradFi's static budget of operating income for the third quarter of 2017. 2. Prepare an analysis of variances for the third quarter of 2017: identify 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? Graduate Finance (GradFi) 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. GradFi's revenue model is to take an upfront fee of 50 basis points (0.50%) each from the alumni investor and the student borrower for every loan originated on its platform. GradFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. GradFi's budgeted and actual results for the third quarter of 2017 are presented below. B: (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare GradFi's static budget of operating income for the third quarter of 2017. (Do not round intermediary calculations. Round the amount you enter into the input cell to the nearest whole dollar.) i Data Table Graduate Finance Static Budget 2017 Loans Static Budget Actual Results Revenues Variable costs: New loans originated 7,800 149,000 9,810 $164,000 Professional labor Average amount of loan Variable costs per loan Credit verification Federal doc fees Professional labor $ 368 (8 hrs at $46 per hour) 102 Courier services 459 (9 hrs at $51 per hour) 102 152 145 Total variable costs Credit verification Federal documentation fees Courier services Administrative costs (fixed) Technology costs (fixed) Contribution margin Fixed administrative costs 85 770,000 1,500,000 $ $ 917,000 1,608,000 $ Fixed technology costs Operating income Requirement 1. Prepare GradFi's static budget of operating income for the third quarter of 2017. 2. Prepare an analysis of variances for the third quarter of 2017: identify 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