Problem 12-17 Software Associates

Problem 12-17: Software Associates

Software Associates (SA) is a computer software consulting firm that specializes in designing and implementing integrated marketing database warehousing programs.  Humphrey Catalog is a client.  In preparing its bid for Humphrey, SA estimates its total labor cost for this project to be $225,500, broken down as follows:

                                    Budgeted Hours                Budgeted Wage                Budgeted Cost

Partner                            100                                      $175                                 $17,500

Associate                         300                                      120                                     36,000

Senior Analyst                 600                                        90                                      54,000

Analyst                          1,000                                     40                                       40,000

Programmer                   3,000                                      25                                      75,000

 

Total                                                                                                                   $225,500

 

After completing the Humphrey contract, SA reports the following the data.

 

                                          Actual Cost                    Actual Hours

Partner                                    90                                $ 15,750

Associate                                280                                  35,000

Senior Analyst                        750                                   63,750

Analyst                                1,400                                   49,000

Programmer                        3,600                                    82,800

Total                                                                            $ 246,300

 

Required:

1.	Prepare a performance report for the Humphrey Catalog project.

2.	Offer a plausible explanation for SA’s performance on the Humphrey project