Fougere Realtors, Inc. specializes in home re-sales. It earns revenuefrom selling fees. Fougere Realtors' major costs are commissions for salespersons, listing agents, and listing companies. Its business has improved steadily over the last ten years. As usual, Chris Fougere, the managing partner of Fougere Realtors, Inc., received a report summarizing the performance for the most recent year.

 

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Fougere Realtors, Ine. Performance Report For the year ended December 31, 2007 Required: a) Explain the major weakness of this performance report and why all the variances for the variable expenses are unfavourable (U) (5 marks) b) As a first step in helping Chris Fougere to evaluate cost / expense control in the organization, complete the following report for the year ended December 31, Budget Actual Variance Number of home re-sales 180 202 22 F Variable expenses Sales commissions $1.102.950 36,000 171.000 $1.205.183 $102.233 U 3.560 U Automobile 39,560 192.690 Advertising General overhead Total Fixed expenses General overhead Total expenses 656 100 S1.966,050 21.690 U 60.870 U SI88.353 U 2007, assuming the only cost driver is the 716,970 $2.154.403 number of home re-sales. (Note: Indicate any variance as either favourable (F) or unfavourable (U).) (15 marks) 60,000 62.300 $2.216.703 2.300U $190.653 U $2.026.050 Fougere Realtors, Ine. Performance Report For the year ended December 31, 2007 Required: a) Explain the major weakness of this performance report and why all the variances for the variable expenses are unfavourable (U) (5 marks) b) As a first step in helping Chris Fougere to evaluate cost / expense control in the organization, complete the following report for the year ended December 31, Budget Actual Variance Number of home re-sales 180 202 22 F Variable expenses Sales commissions $1.102.950 36,000 171.000 $1.205.183 $102.233 U 3.560 U Automobile 39,560 192.690 Advertising General overhead Total Fixed expenses General overhead Total expenses 656 100 S1.966,050 21.690 U 60.870 U SI88.353 U 2007, assuming the only cost driver is the 716,970 $2.154.403 number of home re-sales. (Note: Indicate any variance as either favourable (F) or unfavourable (U).) (15 marks) 60,000 62.300 $2.216.703 2.300U $190.653 U $2.026.050

Answer rating: 100% (QA)

A Major weakness said performance report is cost drivers Since no o... View the full answer