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Grady and Associates performs a varlety of activities related to Information systems and e$-$commerce consulting in Toronto, Canada. The firm, which bills $$152$ per hour for services performed, is in a very tight local labor market and is having difficulty finding quality help for its overworked professional staff. The cost per hour for professional staff time is $$62.$ Selected information follows.

Billable hours to cllents for the year totaled $7,200,$ consisting of information systems services, $4,320$; e$-$commerce consulting, $2,880.$

Administrative cost of $$399,760$ was $($and continues to be$)$ allocated to both services based on billable hours. These costs consist of staff support, $$214,920$; in$-$house computing, $$151,000$; and miscellaneous office charges, $$33,840.$

A recent analysis of staff support costs found a correlation with the number of cllents served. In$-$house computing and miscellaneous office charges varled directly with the number of computer hours logged and number of client transactions, respectively. A tabulation revealed the following data:

$\backslash$table$[[,$Information,E$-$Commerce,$],[$Number of clients,Systems Services,Consulting,Total$],[$Number of computer hours,$270,90,360],[$Number of client transactions,$3,320,2,220,5,540],[,600,780,1,380]]$

Required:

$2.$ Assume that the firm uses traditional costing procedures, allocating total costs on the basis of billable hours. Determine the profitability of the firm'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 actlvity$-$based costing. Determine the profitability of the firm's information systems and e$-$commerce activities, expressing your answer both in dollars and as a percentage of activity revenue.

$4.$ Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend thelr time because, as he notes, "many clients have come to expect both services and we need both to stay in business. Also, information systems and e$-$commerce professionals are pald the same hourly rate." Should Grady's attitude change?

Complete this question by entering your answers in the tabs below.

Required $2$

Required $3$

Required $4$

Assume that the firm uses traditional costing procedures, allocating total costs on the basis of billable hours. Delermine the profitability of the firm's information systems and e$-$commerce activities, expressing your answer both in dollars and as a percentage of activity revenue. $($Do not round intermediate calculations, Round Profitability" to $2$ decimal places.$)$

$\backslash$table$[[$Department$,$Total Billings,Income,Profitability,$],[$Information systems services,,,,$],[$E$-$commerce consulting,,,,$]]$