Altechikom Inc. is a young company founded in 20X8 by ambitious professionals graduatedfromNewCenturyUniversity.Thecompanyprovides servicesrelatedtoe- commerce consulting and information system. Currently, the company is facing difficulties with finding quality help for its overworked professional staff and currently is in a tight local labor market. The firm currently bills $140 per hour for their professional services performed, cost per hour for professional staff time is $50.

Selectedinformationfollows:

	Billable hours
E-commerce consulting	2400
Informationsystemservices	3600
Total	6000

Staffsupport	$207,000
In-housecomputing	$145,000
Miscellaneousoffice	$29,760
TotalAdministrativecost	$381,760

Administrativecostof$381,760 was(andcontinuestobe)allocated tobothservices based on billablehours.Recent analysis ofstaff support costsfound 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 E-Commerce Systems Consulting Services Total Number of clients 60 240 300 Number of computer hours . 2,100 2,900 5,000 Number of client transactions 720 480 1,200