Q.8 Modern Consultants provides accountancy services and has three different categories of client: limited companies, self employed individuals, and employed individuals requiring taxation advice. Modern consultants currently charge its clients a fee by adding a 20% mark-up to total costs. Currently he costs are attributed to each client based on the hours spent on preparing accounts and providing advice. Modern consultants are considering changing to an activity based costing system. The annual costs and the causes of these costs have been analyzed as follow: Accounts preparation and advice Requesting missing information Issuing fee reminders Holding client meetings Travelling to clients Rs. 580,000 30,000 15,000 60,000 40,000 The following details relate to three clients and to modern consultants as a whole: Clients Modern PARTICULARS A B C Consultants Hours spent on preparing 10000 250 340 18000 accounts and providing advice Requests for missing information 4 10 6 250 Payment reminders sent 2 8 10 400 Clients meeting held 4 1 2 250 Mles travelled to meet clients 150 600 0 10000 Required: prepare calculations to show the effect on fees charged to each of these three clients of changing to the new costing system.