Question

Niles and Cohen, CPAs earned $6,478,000 during 20Y4 using 79 employees. During 20Y5, the firm grew revenues to $7,629,900 and expanded the staff to 87 employees.

Required:

a. Determine the revenue per employee for each year.

	Revenue Per Employee
20Y4	$
20Y5	$

b. The growth in revenue was .................. the growth in the number of employees; thus, the revenue per employee .......................... between the two years.

Answer 1

a. Computation of Revenue per Employees:

Particulars		20Y4	20Y5
Revenues	A	$6,478,000	$7,629,900
No of employees	B	$79	$87
Revenue per employee	C=A/B	$82,000	$87,700

b.

Computation of growth in revenue = (Revenue per employees in 20Y5-Revenue per employees in 20Y4)/Revenue per employees in 20Y4*100

= ($87,700-$82,000)/$82,000 *100 = 6.95%

Therefore,

The growth in revenue was 6.95% the growth in the number of employees; thus, the revenue per employee increased between the two years.

{[(Second Month Revenue)-(First Month Revenue)]/(First Month Revenue)}* 100%**