Question
The following information pertains to the next two questions 2-3. Aspen Core Realtors, Inc., specializes in home sales. Revenue is earned from selling fees. Commissions
The following information pertains to the next two questions 2-3.
Aspen Core Realtors, Inc., specializes in home sales. Revenue is earned from selling fees. Commissions for salespersons, listing agents, and listing companies are the main costs for the company. Business has improved steadily over the last ten years. As usual, Bonnie Boris, the managing partner of Aspen Core Realtors, Inc., received a report summarizing the performance for the most recent year.
Aspen Core Realtors, Inc.
Performance Report for the Year Ended December 31, 2015
| I.Master Budget* | II.Flexible Budget** | III.Actual*** | IV.Master Actual Variance |
Total Selling Fees | $2,052,000 | $2,280,000 | $2,243,200 | 191,200F |
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Less Variable Costs |
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Sales Commissions | 1,102,950 | 1,225,500 | 1,205,183 | 102,233U |
Automobile | 36,000 | 40,000 | 39,560 | 3,560U |
Advertising | 93,600 | 104,000 | 103,450 | 9,850U |
Home Repairs | 77,400 | 86,000 | 89,240 | 11,840U |
Variable Overhead | 656,100 | 729,000 | 716,970 | 60,870U |
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Less Fixed Costs |
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General Overhead | 60,000 | 60,000 | 62,300 | 2,300U |
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Total Costs | 2,026,050 | 2,244,500 | 2,216,703 | 190,653U |
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Net Income | 25,950 | 35,500 | 26,497 | 547F |
*Budgeted data based on 180 home sales.
**Flexible Budget based on 200 home sales.
***Actual selling fees and operating costs of 200 home sales.
______ 2. What is the most significant single cause of all of the total unfavorable variable cost variances shown in the Master-Actual Variance column? [5 points]
Aspen Core Realtors spent more than expected.
Aspen Core Realtors spent less than expected.
The number of home sales increased.
Selling fees (prices) increased.
None of the above.
______3. The flexible budget variance for sales commissions is: [5 points]
$122,500 unfavorable
$122,500 favorable
$20,317 unfavorable
$20,317 favorable
None of the above
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