Bridger Canyon Systems Group (BCSG) has substantial year-to-year fluctuations in billings to clients. Top management has...

 

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Bridger Canyon Systems Group (BCSG) has substantial year-to-year fluctuations in billings to clients. Top management has the following policy regarding the employment of key professional personnel: If Gross Annual Billings Are $2,000,000 or less $2,000,001-2,400,000 $2,400,001-2,800,000 Number of Persons to Be Employed 10 11 12 Key Professional Annual Salaries and Benefits $1,000,000 $1,100,000 $1,200,000 Top management believes that the group should maintain a minimum of 10 individuals for a year or more even if billings drop drastically below $2 million. For the past 5 years, gross annual billings for BCSG have fluctuated between $2,020,000 and $2,380,000. Expectations for next year are that gross billings will be between $2,100,000 and $2,300,000. What amount should the group budget for key professional personnel salaries? Graph the relationships on an annual basis, using the two approaches (refined and simplified) illustrated in Exhibit 2-6 on page 42. Indicate the relevant range on each graph. You need not use graph paper; simply approximate the graphi- cal relationships. Bridger Canyon Systems Group (BCSG) has substantial year-to-year fluctuations in billings to clients. Top management has the following policy regarding the employment of key professional personnel: If Gross Annual Billings Are $2,000,000 or less $2,000,001-2,400,000 $2,400,001-2,800,000 Number of Persons to Be Employed 10 11 12 Key Professional Annual Salaries and Benefits $1,000,000 $1,100,000 $1,200,000 Top management believes that the group should maintain a minimum of 10 individuals for a year or more even if billings drop drastically below $2 million. For the past 5 years, gross annual billings for BCSG have fluctuated between $2,020,000 and $2,380,000. Expectations for next year are that gross billings will be between $2,100,000 and $2,300,000. What amount should the group budget for key professional personnel salaries? Graph the relationships on an annual basis, using the two approaches (refined and simplified) illustrated in Exhibit 2-6 on page 42. Indicate the relevant range on each graph. You need not use graph paper; simply approximate the graphi- cal relationships.

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