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.