Burt Management Consultants (BMC) is a multinational consulting group organized geographically. In the U.S. Division, the managing partner for sales (MPS) is responsible for client acquisition. The MPS negotiates project scopes and budgets with the clients. This is done in consultation with the managing partner for projects (MPP), but the MPS has ultimate decision authority for signing agreements. The MPP is responsible for overseeing the completion of the projects and has authority over project staffing and all project work.

The MPS is measured based on total bookings, which are the projected revenues for signed contracts less the costs of the sales department. The MPP is measured on the actual costs incurred relative to the budgeted costs. The budget is adjusted for any modifications to the contracts with respect to either timing or scope of work. 

Both managing partners are paid a fixed salary plus a bonus for meeting or exceeding their performance target. The annual fixed salaries of both partners are set at $600,000. The bonus is set at 2 percent of the amount by which the actual result exceeds the target.

Information on results in the most recent period follows:

Required

a. Assess the performance of the two managing partners.

b. What is the bonus earned by the managing partner of sales?

c. What is the bonus earned by the managing partner of projects?

d. What recommendations would you make concerning the management control system at the U.S. Division of Burt Management Consultants, with respect to the two managing partner positions. 

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Bookings Target bookings....... Actual bookings.... $167,000,000 168,456,000 Project Costs Target project costs Actual project costs $152,000,000 154,235,000