Case ID: UVAC2180
Solution ID: 23308
Words: 1111
Price $ 75

Finnegans Gardens Case Solution

Case Solution

Fair Star, a small company dealing in heavy marine transportation was involved in the bidding of Chronicles in 2009. Chronicles’ bidding was viewed as one of the greatest contracts in the industry’s history. The tendering process had taken up to a year and led to a final meeting that decided the future of the company.

Excel Calculations

Shared Expenses Based on FTEs

Shared Expenses Based on Direct Labor Cost

Shared Expenses Based on Direct Labor and Material Cost

Shared Expenses Based on Direct Labor and Material Cost

Earning Statement by Service Lines ( 10% increase in Revenues and Volume of all three services)

Earning Statement by Service Lines ( 10% increase in Revenues and Volume of Design services)

Summary of Expansion Scenarios

Questions Covered

1- Using the information given in the case, allocate the company’s shared costs to each service line four different ways: based on FTEs, direct-labor costs, direct labor plus direct materials, and the specific usage information given to Finnegan by Bennett.

2- Calculate the profit percentage for each service line under each overhead-allocation method. 
 
3- Which service line is the most financially attractive? Does the fact that design and installation clients often use Finnegan’s Gardens for maintenance services change your answer?
 
4- Assume volume and revenues for each service line could grow by 10%. Which service line should Finnegan expand? Is your answer congruent with your answer to Question 3? Why or why not?