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. (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.) Graduate Finance Static Budget 2017 i Data Table Loans Actual Results Revenues Variable costs: Static Budget 7,800 149,000 9,810 Professional labor $ $164,000 Credit verification Federal doc fees New loans originated Average amount of loan Variable costs per loan Professional labor Credit verification Federal documentation fees Courier services 368 (8 hrs at $46 per hour) $ 459 (9 hrs at $51 per hour) Courier services 102 102 145 Total variable costs 152 91 Contribution margin Fixed administrative costs Administrative costs (fixed) $ $ 85 770,000 1,500,000 $ $ 917,000 1,608,000 Fixed technology costs Technology costs (fixed) Operating income Requirement - X 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? Enter any number in the edit fields and then click Check Answer. 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. (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.) Graduate Finance Static Budget 2017 i Data Table Loans Actual Results Revenues Variable costs: Static Budget 7,800 149,000 9,810 Professional labor $ $164,000 Credit verification Federal doc fees New loans originated Average amount of loan Variable costs per loan Professional labor Credit verification Federal documentation fees Courier services 368 (8 hrs at $46 per hour) $ 459 (9 hrs at $51 per hour) Courier services 102 102 145 Total variable costs 152 91 Contribution margin Fixed administrative costs Administrative costs (fixed) $ $ 85 770,000 1,500,000 $ $ 917,000 1,608,000 Fixed technology costs Technology costs (fixed) Operating income Requirement - X 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? Enter any number in the edit fields and then click Check
