Globe Services provides consulting services to government and corporate clients. Because of security concerns, the firm has a separate staff servicing the two kinds of clients. However, one information systems (IS) group services the two groups of consultants. Likewise, a single administrative support (AS) department provides all needed secretarial and administrative support. Globe Services wishes to base its billing rates on the cost per hour of consulting provided by its staff. Assume that each person in the Government and Corporate consulting group provides 1,500 hours of billable support per year. The following table provides relevant data.

		IS	AS	Government	Corporate
Traced Costs		$ 1,020,000	$ 600,000	$ 2,400,000	$ 3,240,000
		Services Consumed by
		IS	AS	Government	Corporate
Services provided by	IS (hours)		2,000	1,000	7,000
	AS (headcount)	10		15	25

a. Use the direct method to allocate teh support department costs to the government and corporate clients. What is the cost per hour of consulting provided by the government and corporate groups?

b. Suppose government regulations require Globe Services to use the reciprocal method to allocate the costs of support departments to line departments. The government then will reimburse Globe Services 115% of the cost of service assuming 1,500 billable hours. At what rate per hour will the government reimburse Globe Services?