Business, 09.04.2021 04:00 elisdavis

Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bills $162 per hour for services performed, is in a very tight local labor market and is having difficulty finding quality help for its overworked professional staff. The cost per hour for professional staff time is $72. Selected information follows. Billable hours to clients for the year totaled 8,400, consisting of information systems services, 5,040; e-commerce consulting, 3,360.
Administrative cost of $417,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of staff support, $222,840; in-house computing, $157,000; and miscellaneous office charges, $37,920.
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 Systems E-Commerce Consulting Total
Services
Number of clients 255 75 330
Number of computer hours 3,740 2,340 6,080
Number of client transactions 720 840 1,560
1. Assume that the firm uses traditional costing procedures, allocating total costs on the basis of billable 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
2. 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.
3. 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?

Answers: 3

Show answers

Other questions on the subject: Business

Business, 21.06.2019 19:20, recon12759

Which of the following accurately describes a surplus? a. consumer demand for a certain car is below the number of cars that are produced. b. the production costs for a certain car are below the sale price of that car. c. a reduction in the cost of steel enables a car company to reduce the sale price of its cars. d. a car company tries to charge too high a price for a car and has to reduce the price. 2b2t

Answers: 1

continue

Business, 22.06.2019 22:10, liliana74

Atoy store has a new game in stock, but customers aren't buying it. which of the following types of inventory increases when customers aren't buying this game? a. work-in-process b. raw materials c. finished goods d. in-transit

Answers: 3

continue

Business, 23.06.2019 00:40, maddie1776

Assume the total cost of a college education will be $250,000 when your child enters college in 17 years. you presently have $69,000 to invest. what annual rate of interest must you earn on your investment to cover the cost of your child’s college education? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

Answers: 2

continue

Business, 23.06.2019 01:30, sabrinarasull1pe6s61

Akika corporation started as a small firm and has grown substantially in the past decade. its interests span from electronics to real estate and aviation. akika's board of directors have now decided to create independent business units for and categorize the actions performed under each domain. each business unit will have distinct roles and responsibilities. which of the 14 principles of fayol does this exemplify?

Answers: 3

continue

You know the right answer?

Grady and Associates performs a variety of activities related to information systems and e-commerce...