Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bills $148 per hour

image text in transcribed image text in transcribed

Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bills $148 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 $58. Selected information follows. Billable hours to clients for the year totaled 6,800, consisting of information systems services, 4,080; e-commerce consulting, 2,720. Administrative cost of $393,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of staff support, $212,280; in-house computing, $149,000; and miscellaneous office charges, $32,480. 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: Number of clients Number of computer hours Number of client transactions Information Systems Services 260 3,180 560 E-Commerce Consulting 80 2,180 760 Total 340 5,360 1,320 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. (Round intermediate calculations and final answers to 2 decimal places.) Income Profitability Department Total Billings Information systems services | $ 603,840.00 E-commerce consulting | $ 402,560.00

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Electronic Health Records An Audit And Internal Control Guide

Authors: Rebecca S. Busch

1st Edition

0470258209, 978-0470258200

More Books

Students also viewed these Accounting questions

Question

Identify and describe the major content perspectives on motivation.

Answered: 1 week ago