Fougere Realtors, Inc., specializes in home resales. It earns revenue from selling fees. Fougere Realtors' major costs are commission for salespersons, listing companies and listing agents. Its business has improved gradually over the last ten years. As usual, Chris Fougere, the managing partner of Fougere Realtors, Inc., received a report summarizing the performance for the current year.
Required:
a) Describe the major weakness of the performance report.
b) Describe clearly why all the variances for the variable expenses are unfavorable (U).
c) As a first step in helping Chris Fougere to determine cost/expense control in the organization, complete the subsequent for the year ended 31st December, 2007, assuming the only cost driver is the number of home re-sales. (Note: Indicate any variance as either favourable (F) or unfavourable (U).)