Hill Financing is a new company that wants to use the power of social communities to transform the student loan market. Hill Financing revenue model is to take an upfront fee of 30 basis point (0.30% each from the alumni investor and the student borrow for every loan originated on its platform). Hill Financing hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition Hill Financing budgeted and actual results for the third quarter of 20XX are presented below.

	Actual	Budgeted
New loans originated	4,100	5,000
Average amount of Loan	$200,000	$160,000
Variable costs per loan:
Professional labor	$300 (5 hrs at $60)	$400 (8 hrs at $50)
Credit verification	$100	$120
Federal Documentation Fee	$120	$100
Coutier services	$50	$55
Fixed costs:
Administrative costs	$800,000	$600,000
Technology costs	$1,500,000	$1,000,000

Required:

(1) Prepare contribution margin income statement for actual results, statistic budget and flexible budget

FILL OUT

	Actual	Flexible Budget	Static Budget
New Loans Originated:
Revenue (Fees)
Variable costs:
Professional labor
Credit verification
Federal Documentation Fee
Courier services
Total Variable costs
Contribution Margins
Fixed Costs:
Administrative costs
Technology costs
Total Fixed costs
Operating Income:

Required:

1. Prepare contribution margin income statement for actual results, statistic budget and flexible budget.
2. Calculate static budget variance, flexible budget variance and sales volume variance.
3. Analyze and discuss static budget variance, flexible budget variance and sales volume variance for this problem.