Environmental Business Consultants (EBC) has two offices, one in northern California and one in southern California. EBC
Question:
Environmental Business Consultants (EBC) has two offices, one in northern California and one in southern California. EBC provides three basic services to its clients: rate reviews, contract procurement and negotiations, and operational studies. EBC management wants to determine how many projects of each service would need to be performed in 2020 to achieve a before-tax profit of \($650,000.\) EBC managers have gathered the following information from 2018 for the analysis. The proportion of projects done in each office was as follows:
The average contribution margin for each project type was as follows:
EBC has budgeted 2018 fixed expenses to be \($2,251,159\) and \($644,341\) in the northern and southern California offices, respectively.
Required
1. How many projects of each type must EBC perform in the northern California office if managers expect the office to generate \($450,000\) of the desired total income?
2. How many projects of each type must EBC perform in the southern California office if managers expect the office to generate \($200,000\) of the desired total income?
Step by Step Answer:
Financial & Managerial Accounting For Undergraduates
ISBN: 9781618533104
2nd Edition
Authors: Jason Wallace, James Nelson, Karen Christensen, Theodore Hobson, Scott L. Matthews