accounting project, accounting homework help

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fuerlnafu

Business Finance

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An accounting project. All details are inside attached.

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UNIVERISTY OF CALIFORNIA DAVIS ARE 119 GROUP ASSIGNMENT PART II Please form groups of 4 to 6 people (not to exceed 7) for this assignment. Each group will need to submit a short report. The report must be prepared to cater to the proper audience. Facts: The W Company Civil Engineers consists of two divisions. The divisions are Water and Waste Water. The company sells engineering services to various customers. The following are the bill rates for the various staff classifications: Vice President $200/hour Senior Engineer $180/hour Staff Engineer $150/hour. The two divisions expect to bill the following hours: Water- 10000 hours, vice president at 10% of the time, 30% of Senior Engineer time and remaining to Staff Engineers. Waste Water- 6000 hours, vice president at 20% of the time, 20% of 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 Staff Engineer $40/hour. The utilization for each staff members are as follows: Vice President 60% Senior Engineer 80% Staff Engineer 90%. The company has the following other costs: Admin Salaries $90,000 Rent $100,000 Utilities $6,000 Benefits $76,000 Assume that all staff is on salaried basis. Any unutilized time will include vacation, sick and administrative time. Project Part II: 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. Therefore, to accomplish that the following questions should be answered during the presentation and the write up. (1). Prepare a static budget for the company. (2). Assume that the actual utilization came in at the following rates: VP-50% Senior-82% Staff-93% Based on the above utilization, prepare a flexible budget and calculate the Level 2/3 variances. (3). What recommendations can be made for the upcoming year in budgeting to the CFO for additional profitability and increasing revenue? (4). What approaches would your recommendations to increase the company overall utilization of staff and billable hours? (5). How will your recommendations impact customer profitability or divisional profitability? (6). The company wants to add a new division. It will be the Construction Division with 3 people. Please discuss pros and cons of adding a division and when you might consider not to add the division.
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1
WATER
VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

10%
30%
60%

VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

WASTE WATER
20%
20%
60%

VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

static Budget
10000 PAY/HOUR
TOTAL billing
utilization rate
1000
200
200000
0,6
3000
180
540000
0,8
6000
150
900000
0,9
$ 1.640.000,00
6000 PAY/HOUR
TOTAL billing
1200
200
240000
0,6
1200
180
216000
0,8
3600
150
540000
0,9
$
996.000,00

total labor costs
WATER
10000 PAY/HOUR
labor costs
10%
1000
80
80000
30%
3000
60
180000
60%
6000
40
240000
$
500.000,00
WASTE WATER
6000 PAY/HOUR
TOTAL billing
20%
1200
80
96000
20%
1200
60
72000
60%
3600
40
144000
$
312.000,00

total labor costs
costs
Admin Salaries
Rent
Utilities
Benefits
total costs
PROFIT

WATER
VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

10%
30%
60%

VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

WASTE WATER
20%
20%
60%

total billing

flexible budget
10000 PAY/HOUR
TOTAL billing
utilization rate
1000
200
200000
0,5
3000
180
540000
0,82
6000
150
900000
0,93
$ 1.640.000,00
6000 PAY/HOUR
TOTAL billing
1200
200
240000
0,5
1200
180
216000
0,82
3600
150
540000
0,93
$
996.000,00

total labor costs
10000 PAY/HOUR
labor costs
10%
1000
80
80000
30%
3000
60
180000
60%
6000
40
240000
$
500.000,00
WASTE WATER
6000 PAY/HOUR
TOTAL billing
20%
1200
80
96000
20%
1200
60
72000
60%
3600
40
144000
$
312.000,00
WATER

VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER

VICE PRESIDENT
SENIOR ENGINEER
STAFF ENGINEER
total labor costs
costs
Admin Salaries
Rent
Utilities
Benefits
total costs
PROFIT

(3). What recommendations can be...


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