Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in...
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Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bills $156 per hour for services performed, is in a very tight local labor market and is having dificulty finding quality help for its overworked professional staff The cost per hour for professionail staff time is $66. Selected information follows • Billable hours to cients for the year totaled 7,600, consisting of information systems services. 4,560, e commerce consulting. 3,040 Administrative cost of $405760 was (and continues to be) allocated to both services based on billable hours These costs consist of staff support. $217.560, in-house computing. $153,000; and miscellaneous office charges, $35.200. A recent analysis of staff support costs found a correlation with the number of clients served. In-house computing and miscellaneous office charges varied directly with the number of computer hours logged and number of client transactions, respectively. A tabulation revealed the following data Information Systen Services 200 E-Comerce Consulting 100 Total 380 Nunber of clients Nuber of corputer hours Number of client transactions 3,460 640 2,260 see 5,720 1,440 Required: 2. Assume that the firm uses traditional costing procedures, allocating total costs on the basis of biable hours Determine the profitability of the firm's information systems and e-commerce activities, expressing your answer both in dollars and as a percentage of activity revenue 3. Assume that the firm uses activity-based costing Determine the profitability of the firm's e-commerce and Information systems activities, expressing your answer both in dollars and as a percentage of activity revenue. 4. Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their time because, as he notes, "many clients have come to expect both services and we need both to stay in business. Also, information systems and e-commerce professionals are paid the same hourly rate." Should Grady's attitude change? Complete this question by entering your answers in the tabs below. Required 2 Required 3 Required 4 Assume that the firm uses traditional costing procedures, allocating total costs on the basis of bilable hours. Determine profitability of the firm's information systems and e-commerce activities, expressing your answer both in dollars and as percentage of activity revenue. (Do not round intermediate calculations. Round "Profitability to 2 decimal places.) Total Biings 711,360 Department Profitability Income Information eystems services E-commerce consuting 474.240 Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bills $156 per hour for services performed, is in a very tight local labor market and is having dificulty finding quality help for its overworked professional staff The cost per hour for professionail staff time is $66. Selected information follows • Billable hours to cients for the year totaled 7,600, consisting of information systems services. 4,560, e commerce consulting. 3,040 Administrative cost of $405760 was (and continues to be) allocated to both services based on billable hours These costs consist of staff support. $217.560, in-house computing. $153,000; and miscellaneous office charges, $35.200. A recent analysis of staff support costs found a correlation with the number of clients served. In-house computing and miscellaneous office charges varied directly with the number of computer hours logged and number of client transactions, respectively. A tabulation revealed the following data Information Systen Services 200 E-Comerce Consulting 100 Total 380 Nunber of clients Nuber of corputer hours Number of client transactions 3,460 640 2,260 see 5,720 1,440 Required: 2. Assume that the firm uses traditional costing procedures, allocating total costs on the basis of biable hours Determine the profitability of the firm's information systems and e-commerce activities, expressing your answer both in dollars and as a percentage of activity revenue 3. Assume that the firm uses activity-based costing Determine the profitability of the firm's e-commerce and Information systems activities, expressing your answer both in dollars and as a percentage of activity revenue. 4. Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their time because, as he notes, "many clients have come to expect both services and we need both to stay in business. Also, information systems and e-commerce professionals are paid the same hourly rate." Should Grady's attitude change? Complete this question by entering your answers in the tabs below. Required 2 Required 3 Required 4 Assume that the firm uses traditional costing procedures, allocating total costs on the basis of bilable hours. Determine profitability of the firm's information systems and e-commerce activities, expressing your answer both in dollars and as percentage of activity revenue. (Do not round intermediate calculations. Round "Profitability to 2 decimal places.) Total Biings 711,360 Department Profitability Income Information eystems services E-commerce consuting 474.240
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