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To: Windseye who wrote (60303)5/2/1999 12:10:00 PM
From: rupert1  Respond to of 97611
 
Doug: Volume would produce efficiencies of scale in the ratio of management and administrative systems and marketing costs to working consultants, but also in travel and communication costs, as consulting contracts in specific regions or localities achieved the scale to support regional or local service teams. I agree that much of the SG&A is salary.

I think that the larger the consulting staff, the smaller the per capita marketing costs of the services.



To: Windseye who wrote (60303)5/2/1999 1:42:00 PM
From: Loki  Respond to of 97611
 
Windseye...I am not sure where the
"critical mass" lies at DEC, however, a reduced
sales figure of 15% - 20% would certainly eat into the profit
picture bringing it close to that level.

Therefore, the consolidated statement would indicate a
disproportional (higher) SGA/REV % compared to what was expected.

Loki

Remember in a service industry you are still paying the same
salaries, even when revenues decrease.


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