ARE119 University of California Management Accounting Powerpoint Presentation There should be powerpoint slides including table sheets and word descriptions, please be specific and creative because some requirements of this assignment are not specifically pointed out and our professor wants us to be creative and come up with our own ideas. UNIVERISTY OF CALIFORNIA DAVIS
ARE 119 SUMMER 2019
GROUP ASSIGNMENT PART II
Instructions:
Please form groups of 7 (7 maximum and 4 minimum) people for this assignment. The groups can be
selected randomly. It is the student’s responsibility to find a group. Each group needs to complete the
assignment below. Additionally, each group is required to include a page with each member’s
contribution to the assignment. If a group member has no contributions, that student will get zero for
the assignment. The objective of a group assignment is to get accustomed to working in teams. Grade
is 70% to the written report and 30% to the appropriate high level presentation on the due date.
This is a continuation from Group Assignment Part I.
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
Senior Engineer
Associate Engineer
Staff Engineer
$250/hour
$200/hour
$190/hour
$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
Senior Engineer
Associate Engineer
Staff Engineer
$90/hour
$70/hour
$60/hour
$50/hour.
The utilization (billable ratio to total hours) for each staff members are as follows:
Vice President
Senior Engineer
Associate Engineer
Staff Engineer
60%
80%
85%
90%.
The company has the following other costs:
Admin Salaries
Rent
Utilities
Benefits
$81,000
$120,000
$16,000
$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.
(1). Prepare a static budget for the company.
(2). Assume that the actual utilization came in at the following rates:
Vice President
50%
Senior Engineer
82%
Associate Engineer
88%
Staff Engineer
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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