Boulder Systems Group (BSG) has a substantial year-to-year fluctuation in billings to clients. Top management has the following policy regarding the employment of key personnel:

Top management believes that at least 10 individuals should be retained for a year or more even if billings drop drastically below $2 million. For the past five years, gross annual billings for BSG 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 be budgeted for key professional personnel? Graph the relationships on an annual basis, using the two approaches illustrated in Exhibit 2-3 (page 40). Indicate the relevant range on each graph. You need not use graph paper; simply approximate the graphical relationships.

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Annual Salaries and Related Expenses If Gross Annual Number of Persons to Billings Are $2,000,000 or less 10 $2,000,001 – 2,400,000 $2,400,001 – Be Employed $1,200,000 11 1,320,000 12 1,440,000 2,800,000