Software Associate

Software Associates
1.

Actual
Budget
Actual - Budget
Revenue
3,264,000 3,231,900 32,100
Expense
2,967,610 2,625,550 342,060
Op Profit 296,390 606,350 Profit %
9.1%
18.8%

Budgeted Op Profit 606,350

Revenue Var
F
32,100

0840103Expense Var
U
(342,060)

Actual Op Profit 296,390

This will not be sufficient to explain the profit shortfall.
2.

Actual
Budget
Revenues
$3,264,000
$3,231,900
Less:

Consultants' salaries and fringes
$2,029,050
$1,748,250
Operating expenses
$938,560
$877,300
Total expenses
$2,967,610
$2,625,550

Operating profit
$296,390
$606,350

Operating Statistics

Number of Consultants (FTE)
113
105
Hours supplied
50850
47250
Hours billed
39000
35910
Expected Billing Percentage/Productivity
76.70%
76.00%
Average billing rate
83.69
90
Average compensation per consultant
$17,956
$16,650

Budgeted Profit $606,350 Hours billed variance
=(Actual Hrs billed - Budget Hrs billed)*Budgeted Avg billing rate
$278,100
F
Average billing rate variance
=(Actual Avg billing rate - Budget Avg billing rate)*Actual Hrs billed
($246,090)
U
# of consultants variance
=(Budget # of consultants - Actual # of consultants)*Budget avg compensation per consultant
($133,200)
U
Compensation rate variance
=(Budget Avg compensation per consultant - Actual Avg compensation per consultant)*Actual # of consultants
($147,600)
U
FOH Variance
=Budget Op expenses - Actual Op expenses
($61,260)
U
Actual Profit $296,300

3.

Budgeted Op exp (877,300) # of consultants variance on VOH (40,000)
U
VOH per FTE variance 2,415
F
FOH variance (23,675)
U
Actual Op exp (938,560)

4.