Bautista Associates is a construction engineering firm that prepares detailed construction drawings for single-family homes. The market for this service is very competitive. To compete successfully Bautista must deliver quality service at low cost. Bautista presents the following data for 2019 and 2020. (Click the icon to view the data) Engineering labor-hour costs are variable costs. Engineering support costs for each year depend on the engineering support capacity that Bautista chooses to maintain each year (that is, the number of jobs it can do each year). Engineering support costs do not vary with the actual number of jobs done in a year. Read the requirements. Requirement 1. Calculate the operating income of Bautista Associates in 2019 and 2020. Requirements 2019 2020 $ 870,000 $ 1,215,000 Revenues Costs Engineering labor costs Engineering support costs Total costs 630,000 210,000 840,000 30,000 $ 806,000 259,000 1,065,000 1. Calculate the operating income of Bautista Associates in 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020 3. Comment on your answer in requirement 2. What do these components indicate? 150,000 Operating income Print Done Requirement 2. Calcula (Click to view the ca Data table Calculate the growth cor 2019 2020 Begin by determining the F 300 450 450 $ 2,900 $ 21,000 2,700 26,000 Next, determine the for he information given to you, about which cost is variable. 1. Number of jobs billed 2. Selling price per job 3. Engineering labor-hours 4. Cost per engineering labor-hour 5. Engineering support capacity (number of jobs the firm can do) 6. Total cost of engineering support (space rent, equipment, etc.) 7. Engineering support-capacity cost per job $ 30 $ 31 700 700 $ 259.000 210,000 $ 300 $ $ 370 Bautista Associates is a construction engineering firm that prepares detailed construction drawings for single-family homes. The market for this service is very competitive. To compete successfully Bautista must deliver quality service at low cost. Bautista presents the following data for 2019 and 2020. (Click the icon to view the data) Engineering labor-hour costs are variable costs. Engineering support costs for each year depend on the engineering support capacity that Bautista chooses to maintain each year (that is, the number of jobs it can do each year). Engineering support costs do not vary with the actual number of jobs done in a year. Read the requirements. Requirement 1. Calculate the operating income of Bautista Associates in 2019 and 2020. Requirements 2019 2020 $ 870,000 $ 1,215,000 Revenues Costs Engineering labor costs Engineering support costs Total costs 630,000 210,000 840,000 30,000 $ 806,000 259,000 1,065,000 1. Calculate the operating income of Bautista Associates in 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020 3. Comment on your answer in requirement 2. What do these components indicate? 150,000 Operating income Print Done Requirement 2. Calcula (Click to view the ca Data table Calculate the growth cor 2019 2020 Begin by determining the F 300 450 450 $ 2,900 $ 21,000 2,700 26,000 Next, determine the for he information given to you, about which cost is variable. 1. Number of jobs billed 2. Selling price per job 3. Engineering labor-hours 4. Cost per engineering labor-hour 5. Engineering support capacity (number of jobs the firm can do) 6. Total cost of engineering support (space rent, equipment, etc.) 7. Engineering support-capacity cost per job $ 30 $ 31 700 700 $ 259.000 210,000 $ 300 $ $ 370
