Please see attached. Use the numbers from Part 1 answers to help solve Group Assignment Two Questions (attached), please use the Part 2 excel template to fill out the numbers and then answer the following questions in deep detail. Thank you!

UNIVERISTY OF CALIFORNIA DAVIS ARE 119 GROUP ASSIGNMENT PART II Please form groups of 4 to 6 people (not to exceed 7) for this assignment. Each group will need to submit a short report. The report must be prepared to cater to the proper audience. Facts: The W Company Civil Engineers consists of two divisions. The divisions are Water and Waste Water. The company sells engineering services to various customers. The following are the bill rates for the various staff classifications: Vice President $200/hour Senior Engineer $180/hour Staff Engineer $150/hour. The two divisions expect to bill the following hours: Water- 10000 hours, vice president at 10% of the time, 30% of Senior Engineer time and remaining to Staff Engineers. Waste Water- 6000 hours, vice president at 20% of the time, 20% of Senior Engineer time and remaining to Staff Engineers. The Direct Labor costs per hours are as follows: Vice President $80/hour Senior Engineer $60/hour Staff Engineer $40/hour. The utilization for each staff members are as follows: Vice President 60% Senior Engineer 80% Staff Engineer 90%. The company has the following other costs: Admin Salaries $90,000 Rent $100,000 Utilities $6,000 Benefits $76,000 Assume that all staff is on salaried basis. Any unutilized time will include vacation, sick and administrative time. Project Part II: You are an outside consulting firm and the company Board and the CFO have engaged you. The ultimate goal of the Board and the CFO is to improve profitability. 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: VP-50% Senior-82% Staff-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. W Company Company Vice President Utilization Senior Utilization Associate Utilization Staff Utilization Total Hours in a Year Water Waste Water 60% 80% 80% 90% 60% 80% 80% 90% 2,080 2,080 60% 80% 80% 90% 2,080 Vice President Bill Rate Senior Bill Rate Associate Engineer Staff Bill Rate $ $ $ $ 210.00 190.00 170.00 160.00 $ $ $ $ 210.00 190.00 170.00 160.00 $ $ $ $ 210.00 190.00 170.00 160.00 Vice President DL Rate Senior DL Rate Associate Eng DL Rate Staff DL Rate $ $ $ $ 80.00 60.00 50.00 40.00 $ $ $ $ 80.00 60.00 50.00 40.00 $ $ $ $ 80.00 60.00 50.00 40.00 Total Hours 18,000 11,000 61.1% 10% 15% 15% 60.0% 7,000 38.9% 20% 10% 10% 60.0% 2,500 2,350 2,350 10,800 18,000 1,100 1,650 1,650 6,600 11,000 1,400 700 700 4,200 7,000 2,080 2,080 2,080 2,080 2,080 2,080 2,080 2,080 2,080 2,080 2,080 2,080 1,248.00 1,664.00 1,664.00 1,872.00 1,248.00 1,664.00 1,664.00 1,872.00 1,248.00 1,664.00 1,664.00 1,872.00 2.00 1.41 1.41 5.77 10.60 0.88 0.99 0.99 3.53 6.39 1.12 0.42 0.42 2.24 4.21 VP Hours Allocation Senior Hours Allocation Associate Hours Allocation Staff Hours Allocation VP Hours Billable Needed Senior Hours Billable Needed Associate Hours Billable Needed Staff Hours Billable Needed Total Hours Check VP Available Hours Senior Available Hours Associate Available Hours Staff Available Hours VP Available Billable Hours Senior Available Billable Hours Associate Available Billable Hours Staff Available Billable Hours VP Count Senior Count Associate Count Staff Count Total FTE Revenues VP Senior Associate Staff $ $ $ $ 525,000.00 446,500.00 399,500.00 1,728,000.00 $ $ $ $ Total Revenue $ 3,099,000.00 $ 231,000.00 313,500.00 280,500.00 1,056,000.00 $ $ $ $ 294,000.00 133,000.00 119,000.00 672,000.00 1,881,000.00 $ 60.7% 1,218,000.00 39.3% Direct Labor Costs VP Senior Associate Staff $ $ $ $ 200,000.00 141,000.00 117,500.00 432,000.00 Total DL Costs $ Gross Margin % $ Total OH Hours VP Senior Associate Staff $ $ $ $ $ $ $ $ 112,000.00 42,000.00 35,000.00 168,000.00 890,500.00 $ 533,500.00 $ 357,000.00 2,208,500.00 $ 71.3% Indirect Costs 1,347,500.00 $ 71.6% 1,666.67 587.50 587.50 1,200.00 88,000.00 99,000.00 82,500.00 264,000.00 733.33 412.50 412.50 733.33 Total OH Labor Costs VP Senior Associate Staff Total Labor OH Costs $ $ $ $ $ 133,333.33 35,250.00 29,375.00 48,000.00 245,958.33 $ $ $ $ $ Admin Salaries % Revenue Rent % Revenue Utilities % Revenues Benefits % Reveneus $ $ $ $ 90,000.00 100,000.00 6,000.00 76,000.00 $ $ $ $ Operating Income % $ 1,690,541.67 $ 55% 80,929.33 21,395.69 17,829.74 29,134.56 149,289.33 60.7% 54,627.30 60,697.00 3,641.82 46,129.72 861,000.00 70.7% 933.33 175.00 175.00 466.67 $ $ $ $ $ $ $ $ $ 52,404.00 13,854.31 11,545.26 18,865.44 96,669.01 39.3% 35,372.70 39,303.00 2,358.18 29,870.28 1,033,114.23 $ 55% 657,426.44 54% Budgeted Revenue Vice President Senior Engineer Staff Engineer Direct Labor Cost Vice President Senior Engineer Staff Engineer Contribution Margin Indirect Labor Cost Fixed Costs Admin Salaries Utilities Rent Benefits Net Income Budgeted Water Waste Water Fixed Budgeted Water Variances Waste Water Budgeted Water Waste Water