I only need the answers for the questions in second page.

For the past five years, Canax Consulting Ltd. has been running a consulting practice in which it provides two major services: general management consulting and executive training seminars. The CFO is not quite sure that he is charging accurate fees for the different services Canax provides. He has recently read an article about activity-based costing that convinced him he could use ABC to improve the accuracy of his costing. He has gathered the following selected information concerning the consulting practice during the previous year: Overhead Activities Cost Pools Activities Cost Drivers Planning and review $ 1,000,000 120,000 hours Billable hours Research 150,000 400 journals Journals purchased General administration 1,800,000 600 clients Number of clients Building and equipment 360,000 2,400 square metres Square metres occupied Clerical 306,000 34 professionals Professional staff $3,616,000 In addition, the CFO gathered the following statistics for the two types of services provided to clients during the year: Management Consulting Executive Training $1,800,000 $800,000 90,000 30,000 280 150 240 360 1,600 800 20 14 Direct labour costs Billable hours Journals purchased Number of clients Square metres Professional staff Instructions Explain and discuss Activity Based Accounting and how it can help Company's and managers to make decisions. Discuss the pros and cons In the past, the CFO took the total overhead costs and divided them by the total billable hours to determine an average rate. To this amount he would then add After reviewing the ABC methodology described in part (b), identify one significant flaw in how the overhead costs will be allocated by the CFO in the ABC system. Discuss how this flaw would affect the average hourly charge-out rates (that is increase or decrease the rates) for management consulting and executive training. You do not have to calculate the new rates to answer this part of the question Based on your findings, consider alternative methodologies, their impact and provide a recommendation for the Company