Finnegan’s Garden Essay

The dual-lane costs of each service line can be apportiond in several different ways. You can allocate based on FTEs, send out-labor costs, send off labor plus direct materials or by full-strength footage usage. If you were to allocate the dual-lane costs for Finnegans Gardens by FTE you would allocate $24,778 to design, $89,203 to knowledgeability, $56,991 to maintenance and $24,778 to administration. To elaborate the allocation based on FTEs, I divided the FTE account given over for each service line and divided it by the total number of FTEs.I then compute the result 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 maintenance. To allocate the costs based on direct labor, I mensurable 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. If yo u add in the direct materials to the direct labor, you would allocate $42,231 to design, $94,736 to installation and $58,782 to maintenance.I used the same rule to allocate the direct labor plus direct materials as I used to allocate the costs based on direct labor. The termination 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 maintenance 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 worthy revenue that more(prenominal) than covers their expenses. Even if you add in the shared costs, it leave still h ave the largest profit margin. I think Finnegans should dramatize the maintenance service line. I deliberate that expanding this service line by 10% would be in the best interest of the company.Even though this expansion would require Finnegan to purchase an supernumerary vehicle and rent additional nursery space, the expense of these wo items is not more than 10% increase in the revenue. I believe that in order for the company to make more money, it would need to spend 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 mass of the maintenance business comes from the design and installation service lines, I believe construeing customers to sign up for maintenance of their lawns would be easier than trying to find customers who want to redo their landscape.