Finnegan’s Garden Essay

The shared cost of severally service tonal pattern can be allocated in several(prenominal) different ways. You can allocate based on FTEs, direct-labor costs, direct labor plus direct materials or by square footage usage. If you were to allocate the shared costs for Finnegans Gardens by FTE you would allocate $24,778 to design, $89,203 to installation, $56,991 to nutriment and $24,778 to administration. To visualize the allocation based on FTEs, I divided the FTE number given for each service extraction and divided it by the keep down number of FTEs.I then multiplied the firmness by the total shared costs of $195,750. If you chose to allocate based on direct labor, you would allocate $43,843 to design, $119,360 to installation and $76,390 to victuals. To allocate the costs based on direct labor, I calculated the direct labor rate per hour for each service line. I divided this number by the total direct labor hours and multiplied that result by the total of the shared costs. I f you add in the direct materials to the direct labor, you would allocate $42,231 to design, $94,736 to installation and $58,782 to nutriment.I utilise the same method to allocate the direct labor plus direct materials as I used to allocate the costs based on direct labor. The last method I used for allocating the shared costs was based on the square footage. To allocate the shared costs based on square footage, you would allocate $$113,661 to design, $20,522 to installation, $20,522 to fear and $41,044 to administration. When you look at the Earnings Statement by Service Line, it appears that maintenance has the largest profit margin. This can be attributed to the fact that Finnegans design and installation customers often use them for their maintenance services too.I would have to agree with the earnings statement. The maintenance service line produces decent revenue that more than covers their expenses. Even if you add in the shared costs, it will still have the largest profi t margin. I think Finnegans should expand the maintenance service line. I believe that expanding this service line by 10% would be in the best interest of the company.Even though this expansion would require Finnegan to procure an additional vehicle and rent additional nursery space, the expense of these wo items is not more than 10% accession in the revenue. I believe that in order for the company to make more money, it would need to blow over a little more money to do so. I believe that expanding the maintenance service line would also be easier to achieve than expanding the other two service lines. Even though the majority of the maintenance business comes from the design and installation service lines, I believe finding customers to sign up for maintenance of their lawns would be easier than trying to find customers who want to redo their landscape.