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Please provide explanations. Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bilts
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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 bilts $154 per hour for services performed, is in a very tight local labor market and is having difficulty finding quality help for its overworked professional staft. The cost per hour for professional staff time is $64. Selected information follows. - Billable hours to clients for the year totaled 7.400, consisting of information systems services, 4.440; e-commerce consulting. 2.960. - Administrative cost of $402,760 was (and continues to be) allocated to both services based on billable hours, These costs consist of staff support, $216,240, in-house computing. $152.000, and miscellaneous office charges, $34,520. 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: Required: 2. Assume that the firm uses traditional costing procedures, allocating total costs on the basis of billable hours. Determine the profitability of the fitm's information systems and e-commerce activities, expressing your answer both in dollars and as a percentage of activity revenue. 3. 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 Step by Step Solution
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