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Case
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Reference no. UVA-C-2180
Published by: Darden Business Publishing
Originally published in: 2003
Version: 17 June 2009
Length: 6 pages
Data source: Published sources

Abstract

This case provides students with an opportunity to understand how to analyze costs and profit at the service-line level. Students have a chance to allocate general and administrative costs to service lines in a number of different ways and are directed toward considering drivers of overhead expenses in the allocation process. In addition, students should be challenged to discuss whether it even makes sense, in this setting, to allocate all the general and administrative costs. Finally, students are asked to calculate the incremental contribution margin percentage for each service line, and determine which service line(s) Finnegan should try to expand.

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Abstract

This case provides students with an opportunity to understand how to analyze costs and profit at the service-line level. Students have a chance to allocate general and administrative costs to service lines in a number of different ways and are directed toward considering drivers of overhead expenses in the allocation process. In addition, students should be challenged to discuss whether it even makes sense, in this setting, to allocate all the general and administrative costs. Finally, students are asked to calculate the incremental contribution margin percentage for each service line, and determine which service line(s) Finnegan should try to expand.

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