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 recent hear appears below.

Required
1. Analyze 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 3. What does it say about the company's performance? Is the report reliable? Explain your answer.
5. What recommendations would your make to improve the company's performance next year?

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Cassen Realtors, Inc. Performance Report For the Year Ended December 31 Difference Under (Over) Budget Budgeted $2,052000$2.242200 (S190 200) Actualt Total selling fees Variable costs Sales commissions $1,102,950 $1,205,183 ($102,233) Automobile Advertising Home repairs General overhead 36,000 93,600 77,400 656,100 39,560 103.450 (11840) 89,240 9,850) 716,970 60,870) $1,966,050 $2,154.403($188,353) Fixed costs General overhead 60,000 62,300 2,216,703 ($190653 453 Total costs $2026,050 $ 2 25,950 25,497 Budgeted data are based on 180 units sold Actual data for 200 units sold.