QUESTION 2

1. VF is a small accounting firm supporting wealthy individuals intheir preparation of annual income tax statements. Every December,VF sends out a short survey to their customers, asking for theinformation required for preparing the tax statements. Based on 24years of experience, VF categorizes their cases into the followinggroups:

   • Group 1 (new customers, easy): 25 percent of cases

   • Group 2 (new customers, complex): 20 percent of cases

   • Group 3 (repeat customers, easy): 30 percent of cases

   • Group 4 (repeat customers, complex): 25 percent of cases

   Here, “easy” versus “complex” refers to the complexity of thecustomer’s earning situation. In order to prepare the income taxstatement, VF needs to complete the following set of activities.Processing times (and even which activities need to be carried out)depend on which group a tax statement falls into. All of thefollowing processing times are expressed in minutes per income taxstatement.  

   Group	Filing	Initial Meeting	Preparation	Senior Accountant Review	Writing
   1	20	30	120	20	50
   2	40	90	300	60	80
   3	20	No	150	5	60
   4	40	No	200	30	60

   The activities are carried out by the following threepersons:

   • Administrative support person: filing and writing.

   • Senior accountant (who is also the owner): initial meeting,review by senior accountant.

   • Junior accountant: preparation.

   Assume that all three persons work eight hours per day and 22days a month. For the following questions, assume the product mixas described above. Assume that there are 50 income tax statementsarriving each month.

e. What is the implied utilization rate for the senior account?(Round your answer to the nearest whole number and ignore thepercentage sign. For example, if your answer is 0.45 or 45%, fillin 45; if your answer is 0.76 or 76%, fill in 76.