Keys to the Castle is a mortgage broker. It helps prospective homeowners find low-cost mortgage loans and helps existing homeowners refinance their current loans. The company charges clients a fee equal to 0.5% of the loan amount. The companys static budget and its actual results for March are:

	Static Budget	Actual Results
Number of loans	90	120
Average loan amount	$200,000	$224,000
Commission	0.5% of loan amount	0.5% of loan amount
Variable costs per loan application
Professional labor	6.00 hours at $40 per hour	7.2 hours at $42 per hour
Loan filing fees	$100	$100
Credit checks	$120	$125
Courier mailings	$50	$54
Office support (fixed costs)	$31,000	$33,500

Required

1. Prepare an income statement based on actual results for March.
2. Prepare a static budget income statement for March.
3. Prepare a flexible budget income statement for March.
4. Calculate the following for each line item in the income statement:
   1. Static budget variance
   2. Sales volume variance
   3. Flexible budget variance