Mnzel GmbH helps prospective homeowners of substantial means to find low-cost financing and assists existing homeowners in

Münzel GmbH helps prospective homeowners of substantial means to find low-cost financing and assists existing homeowners in refinancing their current loans at lower interest rates. Münzel works only for customers with excellent borrowing potential. Hence, Münzel is able to obtain a loan for every customer with whom it decides to work. 

Münzel charges clients 0.5% of the loan amount it arranges. In 2016, the average loan amount per customer was €199,000. In 2017, the average loan amount was €200,210. In its 2018 flexible budgeting system, Münzel assumes the average loan amount will be €200,000. 

Budgeted cost data per loan application for 2018 are: 

● Professional labour: 6 budgeted hours at a budgeted rate of €40 per hour 

● Loan filing fees: budgeted at €100 per loan application 

● Credit checks: budgeted at €120 per loan application 

● Courier mailings: budgeted at €50 per loan application. 

Office support (the costs of leases, secretarial workers and others) is budgeted to be €31,000 per month. Münzel GmbH views this amount as a fixed cost. 

Required

1. Prepare a static budget for November 2018 assuming 90 loan applications. 

2. Actual loan applications in November 2018 were 120. Other actual data for November 2018 were: 

● Professional labour: 7.2 hours per loan application at €42 per hour 

● Loan filing fees: €100 per loan application 

● Credit checks: €125 per loan application 

● Courier mailings: €54 per loan application.

Office support costs for November 2018 were €33 500. The average loan amount for November  2018 was €224 000. Münzel received its 0.5% fee on all loans. Prepare a Level 2 variance analysis of Münzel GmbH for November 2018. Münzel’s output measure in its flexible budgeting system is the number of loan applications. 

3. Calculate professional labour price and efficiency variances for November 2018. (Calculate labour price on a per-hour basis.) 

4. What factors would you consider in evaluating the effectiveness of professional labour in November 2018?