Reference no: EM132725334

Question - The 2014 results. Below are the notes from the meeting:

Financial planning - fees are earned from 1,230 clients paying, on average, $800 per annum. Department manager is paid a $141,720 wage that is charged directly to the department. Each of the three client liaison officers are paid $65,530. Total book sales for the last financial year were $50,060.

Business acquisition - fees earned from 15 acquisitions paying on average $40,977 per acquisition. Department manager is paid a $141,720 wage that is charged directly to the department. The business brokers are paid 20% commission on fees earned. The total book sales for the last financial year were $250,300.

Bookkeeping services - fees earned from 359 clients paying on average $200 per month for 12 months. Department manager is paid a $141,720 wage that is charged directly to the department. Direct wages for the department is made up of the business brokers being paid 25% commission on fees earned. Total book sales for the last financial year were $200,240.

Administration - no fees earned. Three administration officers are paid $60,000 per year in wages. The other three support staff are paid $50,000 per year in wages.

a. Using the information from above, calculate the contribution each department has made to Finex and Sons' profit.

b. What actions could be taken to improve the profitability for the business acquisition department?