Engineering services to various customers

Assignment Help Accounting Basics

Reference no: EM131812568

Facts:

The W Company Civil Engineers consists of two divisions. The divisions are Water and Infrastructure. The company sells engineering services to various customers. The following are the bill rates for the various staff classifications:

Vice President $215/hour Senior Engineer $200/hour Associate Engineer $170/hour Staff Engineer $160/hour.

The two divisions expect to bill the following hours:

Water- 12000 hours, vice president at 10% of the time, 30% of Associate/Senior Engineer

time and remaining to Staff Engineers.

Infrastructure- 5000 hours, vice president at 20% of the time, 20% of Associate/Senior Engineer time and remaining to Staff Engineers. The Direct Labor costs per hours are as follows: Vice President $80/hour

Senior Engineer $60/hour

Associate Engineer $$50/hour

Staff Engineer $40/hour.

The utilization for each staff members are as follows: Vice President 65%

Senior Engineer 85% Associate Engineer 90% Staff Engineer 92%.

The company has the following other costs: Admin Salaries	$100,000
Rent	$110,000
Utilities	$9,000
Benefits	$99,000

Note: Assume that all employees are on salary and they are employed for 2080 total hours per year.

You are an outside consulting firm and the company Board and the CFO have engaged you. The ultimate goal of the Board and the CFO is to improve profitability. To accomplish that the following questions should be answered in the write up. The report should be something that would be given to a Board of Directors and a CFO.

(1). Develop an Income Statement budget for the company and the two divisions. All overhead costs can be allocated using percentage of revenues for each division.

(2). Develop a staffing plan based on the expected hours to be billed. This means, how many of the various staff types should be there to accomplish the set goals.

(3). What can the company do to allocate costs differently to the divisions? Prepare a revised Income statement by division.

(4). Make recommendations to improve profitability.

Reference no: EM131812568

Questions Cloud

Prepare a flowchart to represent the procedures : Please Prepare a flowchart to represent the procedures and documents for cash collections from credit customers. Cash Receipts from cash sales are represented

Complete carver and multi-criteria risk spreadsheets : complete the attached Carver and Multi-Criteria Risk Assessment Spreadsheets for that chosen Critical Infrastructure.

Draw a break-even graph to show break-even relationship : Given that you rent three copiers, what daily demand for copies will allow you to break even? Draw a break-even graph to show this break-even relationship.

Discuss excerpt of a conversation between eric and darcy : Eric Inman and Darcy Getz are both cash register clerks for Farmer Johns Markets.

Engineering services to various customers : The company sells engineering services to various customers. The following are the bill rates for the various staff classifications:

Compute the receivable turnover and inventory turnover : Modern Suits Rental has been in business for four years. Compute the receivable turnover, inventory turnover, and payables turnover for each of the four years

Summarize your public health issue : Describe the social, behavioral, and cultural factors associated with this public health issue.

Variance for the number of bedrooms in owner occupied houses : Define a random variable y = number of bedrooms in owner-occupied houses and develop a probability distribution for the random variable.

Beginning of the production process : Polk Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly.

User Account

All Pages