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 $310/hour

Senior Engineer $220/hour

Associate Engineer $210/hour

Staff Engineer $163/hour

The division expects 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 $110/hour

Senior Engineer $90/hour

Associate Engineer $62/hour

Staff Engineer $53/hour.

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

Vice President 65%

Senior Engineer 80%

Associate Engineer 85%

Staff Engineer 92%.

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

Manufacturing Division

Concrete $50,000

Rebar $30,000

Other Materials $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

Assume that there are 2080 hours per year that each engineer can work including vacation and other benefit hours.

Question:

1. Develop a staffing plan (FTE- Full-time equivalent) based on the expected hours to be billed for the Civil Engineering Division. This means, how many of (Full Time Equivalents) the various staff types should be there to accomplish the set goals and billable hours.

2. Develop an Income Statement budget for the company and the two divisions. All overhead costs can be allocated using percentage of revenues.

3. What can the company do to allocate costs differently to the divisions? Prepare a revised Income statement by division.

4. Calculate the breakeven revenue for the company