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What is the total operating income variance

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Reference no: EM132994935

Question - Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2019, Phoenix expects to find renters for 100 apartments with an average first month's rent of $720. Budgeted cost data per tenant application for 2019 follow:

Professional labor: 1.6 hours at $20.00 per hour

Credit checks: $51.00

Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,100 per month. On average, Phoenix is successful in placing one tenant for every three applicants.

Actual rental applications in August 2019 were 270. Phoenix paid $9,400 for 410 hours of professional labor. Credit checks went up to $56 per application. Other costs in August 2019 (lease, secretarial help, and utilities) were $3,700. The average first monthly rentals for August 2019 were $820 per apartment unit for 90 units.

Required -

1. (a) What is the total operating income variance for August 2019? (b) What is the total flexible-budget variance for the month? (c) What is the sales volume variance for the month?

2. Determine the professional labor rate and labor efficiency variances for August 2019.

Reference no: EM132994935

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