PE 12-7A Revenue per employee

Aaron and Rogers, CPAs earned $12,600,000 during 2012 using 90 employees. During 2013, the firm grew revenues to $14,400,000 and expanded the staff to 96 employees.
a. Determine the revenue per employee for each year.
b. Interpret the results.

Answer:
a.
2012: $12,600,000/90 employees
= $140,000 per employee

2013: $14,400,00/96 employees
= $150,000 per employee


b. Aaron and Rogers, CPAs grew revenues by $1,800,000 ($14,400,000 – $12,600,000), or 14.3% ($1,800,000/$12,600,000). The number of employees  expanded by 6, or 6.7% (6/90). The growth in revenue was more than the growth in number of employees; thus, the revenue per employee improved between the two years. The firm is more efficient in generating revenues from its staff resources between the two years.


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