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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 $148 per hour
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
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