The following information pertains to the next two questions 2-3. Aspen Core Rea

ID: 2578580 • Letter: T

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 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

Less Variable Costs

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

Less Fixed Costs

General Overhead

60,000

62,300

2,300U

Total Costs

2,026,050

2,244,500

2,216,703

190,653U

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