Problem 7-28: Static and flexible budgets, service sector. Student Finance is a startup that aims to use the power of social communications to transformthe student loan market. It connects participants through a dedicated lendin gpool, enabling current students to borrow from a schools alumni community. StuFis revenue model is to take an upfront fee of 40 basis points (o.40%) each from the alumni investor and the student borrower for every loan originated on its platform.

ASSIGNMENT MATERIAL 2 tupi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. StuFis budgeted and actual results for the third quarter of 2014 are presented below. Page Layout Insert Home Formulas Data Review Static Budget Actual Results 2 New loans originated 8.200 10,250 Average amount of loan $145,000 $162,000 4 Variable costs per loan $360 (8 hrs at$45 per hour) $475 (9.5 hrs at $50 per hour Professional labor $100 $100 6 Credit verification $120 7 Federal documentation fees $50 8 Courier services $945,000 9 Administrative costs (fixed) $800,000 $1,415,000 000 10 Technology costs (fixed) Req 1. Prepare StuFi's static budget of ting income for the third quarter of 2014. 7-2; identify the 2. Prepare an analysis of variances fo dio quarter of 2014 along the lines of Exhibit third sales volume and flexible budget variances for operating income. 2014. third Compute the professional labor price and efficiency variances for the third quarter of in the What factors would you consider in evaluating the effectiveness of professional labor My Acco quarter of 2014