The Comcast Construction Company does Civil Engineering work and manufacturing. This company consists of two divisions. The divisions are Civil Engineering (CE) and Manufacturing (MF). The company sells construction and design projects to various customers. The following are the bill rates for the various staff classifications in the Civil Engineering Division:

Vice President $300/hour

Senior Engineer $210/hour

Associate Engineer $200/hour

Staff Engineer $163/hour

The CE division expect to bill the following hours to complete projects that they have procured:

Civil Engineering- 13,000 hours, vice president at 10% of the time, 30% of Senior Engineer time 10% to Associate engineers and remaining to Staff Engineers.

The Direct Labor costs per hours are as follows:

Vice President $100/hour

Senior Engineer $90/hour

Associate Engineer $62/hour

Staff Engineer $53/hour.

The utilization (billable ratio to total hours=billable hours/total hours) for each staff members are as follows:

Vice President 65%

Senior Engineer 80%

Associate Engineer 85%

Staff Engineer 92%.

It can be assumed that each full-time equivalent staff member can work 2080 hours (40hours a week times 52 weeks).

Also, the Manufacturing Division (MF) expects to incur the following material costs that are always sold as parts of the project with a 10% gross margin.

Manufacturing Division

Concrete

$60,000

Rebar

$30,000

Other

$10,000

The company has the following other overhead costs:

Admin Salaries $181,000

Software $20,000

CEO Salary $160,000

Rent $111,000

Utilities $16,000

Benefits $75,000

You are an outside consulting firm. The company Board and the CFO have engaged you. The goal ofthe Board and the CFO is to improve profitability of the divisions and company.

1. Create a staffing plan
2. Create an income statement budget for the company and the two divisions. All overhead costs can be allocated using %of revenues
3. What can the company do to allocate costs differently to the division? Provide a revised income statement by division
4. Calculate break even revenue for the company