How prepare the static budget for the company

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Reference no: EM132628922

Facts:

The Comcast Construction 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 $250/hour

Senior Engineer $200/hour

Associate Engineer $190/hour

Staff Engineer $160/hour

The two divisions expect to bill the following hours:

Water- 10,000 hours, vice president at 10% of the time, 20% of Senior Engineer time 10% to Associate engineers and remaining to Staff Engineers.

Waste Water- 6,000 hours, vice president at 12% of the time, 20% of Senior Engineer time, 5% to Associate engineers and remaining to Staff Engineers.

The Direct Labor costs per hours are as follows:

Vice President $90/hour

Senior Engineer $70/hour

Associate Engineer $60/hour

Staff Engineer $50/hour.

The utilization (billable ratio to total hours) for each staff members are as follows:

Vice President 60%

Senior Engineer 80%

Associate Engineer 85%

Staff Engineer 90%.

The company has the following other costs:

Admin Salaries $81,000

Rent $120,000

Utilities $16,000

Benefits $75,000

Assume that there are 2080 hours per year that each engineer can work including vacation and other benefit hours.

Group Assignment:

You are an outside consulting firm and the company Board and the CFO have engaged you. The goal of the Board and the CFO is to improve profitability of the divisions and company. Therefore, to accomplish that the following questions should be answered during the presentation and the write up.

Problem (1). Prepare the static budget for the company.

Reference no: EM132628922

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