ACC503-CitySoft Case Analysis

1. Should we be concerned that CitySoft is focusing on cost, operational control, systems, and quality at the expense of growth?
Answer: We don’t need to be concerned about this issue too much. Actually CitySoft has been growing fast since 1998 to 1999, and it is the time to focus more on its cost, operational control and systems in order to improve CitySoft’s profitability in the future. Refining the process of operation and cost management is quite necessary for CitySoft at this point, because if it kept expanding without improving its cost, operational control and system management, it would make little profit according to the huge cash flow. We can see clearly that CitySoft has already invested much …show more content…

Compare the profitability of the following two projects, Project A and Project B, based on the information given below in Table A and Table B, and the information in the CitySoft Income Statement (Exhibit 6 of the case). While bidding for jobs, CitySoft billed Manager tiem at $150/hour of estimated work, developer time at $75/hour of estimated work, and contractor time at $100/hour of estimated work.
Answer:
* Labor cost is the biggest cost. (Cost of wages and benefits for developers, managers and outside contractor services fee is more than 70% of total expenses-Exhibit 6.) * Compare the two projects’ profitability by calculating 1. Project revenue (revenue=estimated hours*bill price per hour) 2. Actual cost of CitySoft (cost=actual hours*bill price per hour 3. Ratio of