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In excel format, please solve case 5-1 GLo, Inc. recentdly hired you as its chief financial officer and cha developing a sound economic basis for
In excel format, please solve case 5-1
GLo, Inc. recentdly hired you as its chief financial officer and cha developing a sound economic basis for billing its services on determining the cost for each of the three job types tha provides to its customers Background Case 5-1 The issue cen the company The company began operations in 1985 as a paining co founding partners, a husband and wife team, quick lucrative market existed for removing toxic lead-based contractor. Its two realized that a more painted surfaces fro homes and commercial buildings. Numerous governmental er enacting legislation that required property owners to remove all ead aint when refurbishing their buildings. The market demanded l. removal! consumin Lead paint removal is a complex, potentially hazardous, time and expensive task; consequently, it is best left to specialists in the field. I against this backdrop that Jack and Susan Serna formed GLo, stands for Get the Lead Out. Jack Serna developed technical tr nremovinglead paint through educational courses, an apprenticeship wih an out-ofstate company, and trial and error. Susan relied on her ma background to secure lead paint removal contracts. She also operational officer for the business Inc., w rohciencies In 8 serves as the Thecompany rapidly developed an outstanding reputation and grevw quickly. The proliferation of jobs resulted in exponentially increasing revenues in the last decade and required significant hiring and training of personal. While somewhat profitable, the owners felt as though income and cash lows were not commensurate with revenues. Jack stated, "We're busier and busier all the time and we continually work harder than ever, but our bottom line doesn't reflect it Susan expressed concern that job costing and product pricing contributed to the lack of profitability. "It seems to me that we are out of balance," she said. "We know that certain jobs are more intense than other ones are, but we bid them out equally. That just doesn't seem to make sense." Her husband continued. "You're right. In the old days, we just replaced plaster walls and ceilings with new drywall for homeowners. Those jobs are routine. Now, a lot of our business is corporate. These folks have very specihc concerns, because they have to answer to more regulatory agencies th owners do. In addition, companies often occupy older buildings where we have to manually remove lead-based paint from the wood trim an non-lead paint to those surfaces, rather than just gutting the wal. Ihee are definitely non-routine." d a GLo, Inc. recentdly hired you as its chief financial officer and cha developing a sound economic basis for billing its services on determining the cost for each of the three job types tha provides to its customers Background Case 5-1 The issue cen the company The company began operations in 1985 as a paining co founding partners, a husband and wife team, quick lucrative market existed for removing toxic lead-based contractor. Its two realized that a more painted surfaces fro homes and commercial buildings. Numerous governmental er enacting legislation that required property owners to remove all ead aint when refurbishing their buildings. The market demanded l. removal! consumin Lead paint removal is a complex, potentially hazardous, time and expensive task; consequently, it is best left to specialists in the field. I against this backdrop that Jack and Susan Serna formed GLo, stands for Get the Lead Out. Jack Serna developed technical tr nremovinglead paint through educational courses, an apprenticeship wih an out-ofstate company, and trial and error. Susan relied on her ma background to secure lead paint removal contracts. She also operational officer for the business Inc., w rohciencies In 8 serves as the Thecompany rapidly developed an outstanding reputation and grevw quickly. The proliferation of jobs resulted in exponentially increasing revenues in the last decade and required significant hiring and training of personal. While somewhat profitable, the owners felt as though income and cash lows were not commensurate with revenues. Jack stated, "We're busier and busier all the time and we continually work harder than ever, but our bottom line doesn't reflect it Susan expressed concern that job costing and product pricing contributed to the lack of profitability. "It seems to me that we are out of balance," she said. "We know that certain jobs are more intense than other ones are, but we bid them out equally. That just doesn't seem to make sense." Her husband continued. "You're right. In the old days, we just replaced plaster walls and ceilings with new drywall for homeowners. Those jobs are routine. Now, a lot of our business is corporate. These folks have very specihc concerns, because they have to answer to more regulatory agencies th owners do. In addition, companies often occupy older buildings where we have to manually remove lead-based paint from the wood trim an non-lead paint to those surfaces, rather than just gutting the wal. Ihee are definitely non-routine." d a
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