Cssen realtors inc specializes in the sale of residential

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Reference no: EM13584034

Cassen Realtors, Inc., specializes in the sale of residential properties. It earns its revenue by charging a percentage of the sales price. Commissions for sales persons, listing agents, and listing companies are its main costs. Business has improved steadily over the last 10 years. Bonnie Cassen, the managing partner of Cassen Realtors, receives a report summarizing the company's performance each year. The report for the most recet year appears below.

Cassen Realtors , Inc Performance Report for the Year ended December 31

	Budgeted	Actual	Difference Under (Over) Budget
Total Selling Fees	$2,052,000	$2,242,200	($190,200)

Variable costs
Sales commissons	$1,102,950	$1,205,183	($102,233)
Automobile	36,000	39,560	-3,560
Advertising	93,600	103,450	-9,850
Home repairs	77,400	89,240	-11,840
General overhead	656,100	716,970	-60,870
	$1,966,050	$2,154,403	-188,353


Fixed costs
General overhead	60,000	62,300	-2,300
Total costs	$2,026,050	$2,216,703	$190,653
Operating income	$25,950	$25,497	$453

1. Anaylze the performance report. What does it say about the company's performance? Is the performance report reliable? Explain your answer.

2. Calculate the budgeted selling fee and budgeted variable costs per home sale.

3. Prepare a performance report using a flexible budget based on the actual number of home sales.

4. Analyze the report you prepared in requirement

5. What does it say about the company's performance? Is the report reliable? Explain your answer.

6. What recommendations would you make to improve the company's performance next year?

Reference no: EM13584034

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