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The firm, which bills $ 1 6 2 per hour for servictor help for its overworked professional staff. The cost per hour for professional staff
The firm, which bills $ per hour for servictor help for its overworked professional staff. The cost per hour for professional staff time is $ Selected information follows.
Billable hours to clients for the year totaled consisting of information systems services, ; ecommerce consulting,
Administrative cost of $ was and continues to be allocated to both services based on billable hours. These costs consist of staff support, $; in house computing, $; and miscellaneous office charges, $
A recent analysis of staff support costs found a correlation with the number of clients served. Inhouse 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:
tableInformation,ECommerce,DescriptionsSystems Services,Consulting,TotalNumber of clients,Number of computer hours,Number of client transactions,
Required:
Assume that the firm uses activitybased costing. Determine the profitability of the firm's information systems and ecommerce activities, expressing your answer both in dollars and as a percentage of activity revenue.
Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their time because, as he notes, "many have come to expect both services and we need both to stay in business. Also, information systems and ecommerce profess are paid the same hourly rate." Should Grady's attitude change?
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Assume that the firm uses activitybased costing. Determine the profitability of the firm's information systems and ecommerce activities, expressing your answer both in dollars and as a percentage of activity revenue.
Note: Do not round intermediate calculations. Round income to the nearest whole dollar and profitability to decimal places iONLY THE INCOME PART FOR REQUIRED IS WRONG AND ECOMMERCE PROFITABILITY PERCENT EVERYTHING ELSE Is CORRECT
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tableDepartmentTotal Billings,Income,Profitability,,Information systems services,$$
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