Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada The firm, which bills $150 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 $60. Selected information follows • Billable hours to clients for the year totaled 7,000, consisting of information systems services, 4,200; e-commerce consulting, 2,800 • Administrative cost of $396,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of staff support, $213,600; in-house computing, $150,000; and miscellaneous office charges, $33,160 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: Descriptions Number of clients Number of computer hours Number of client transactions Information Systems Services 265 3,250 500 E-Commerce Consulting 85 2,200 770 Total 350 5,450 1,350 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 activity-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 their 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 paid the same hourly rate Should Grades attture channa?
Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada The firm, which bills $150 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 $60. Selected information follows • Billable hours to clients for the year totaled 7,000, consisting of information systems services, 4,200; e-commerce consulting, 2,800 • Administrative cost of $396,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of staff support, $213,600; in-house computing, $150,000; and miscellaneous office charges, $33,160 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: Descriptions Number of clients Number of computer hours Number of client transactions Information Systems Services 265 3,250 500 E-Commerce Consulting 85 2,200 770 Total 350 5,450 1,350 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 activity-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 their 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 paid the same hourly rate Should Grades attture channa?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please don't give image format
![4. Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their time because, as he not
have come to expect both services and we need both to stay in business. Also, information systems and e-comme
are paid 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. Determine
profitability of the firm's information systems and e-commerce activities, expressing your answer both in dollars and as
percentage of activity revenue.
Note: Round "Profitability" to 2 decimal places (i.e.1234 = 12.34%)
Total Billings
Department
Information systems services
E-commerce consulting
Income
Profitability
Required 3 >
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4372ec4d-b133-43db-9782-a231351f841b%2Fc4f9033d-859f-4eab-85cc-5a231c12bba8%2Fkmkhfvv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their time because, as he not
have come to expect both services and we need both to stay in business. Also, information systems and e-comme
are paid 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. Determine
profitability of the firm's information systems and e-commerce activities, expressing your answer both in dollars and as
percentage of activity revenue.
Note: Round "Profitability" to 2 decimal places (i.e.1234 = 12.34%)
Total Billings
Department
Information systems services
E-commerce consulting
Income
Profitability
Required 3 >
%
![Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada
The firm, which bills $150 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 $60. Selected information follows
• Billable hours to clients for the year totaled 7,000, consisting of information systems services, 4,200; e-commerce consulting, 2,800.
• Administrative cost of $396,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of
staff support, $213,600, in-house computing, $150,000, and miscellaneous office charges, $33,160.
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:
Descriptions
Number of clients.
Number of computer hours
Number of client transactions.
Information
Systems Services
265
3,250
500
E-Commerce
Consulting
85
2,200
770
Pozy
Total
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 activity-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.
350
5,450
1,350
4. Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their 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 paid the same hourly rate. Should Grady's attitude change?
1 of 4
Next >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4372ec4d-b133-43db-9782-a231351f841b%2Fc4f9033d-859f-4eab-85cc-5a231c12bba8%2Firsaf7k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada
The firm, which bills $150 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 $60. Selected information follows
• Billable hours to clients for the year totaled 7,000, consisting of information systems services, 4,200; e-commerce consulting, 2,800.
• Administrative cost of $396,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of
staff support, $213,600, in-house computing, $150,000, and miscellaneous office charges, $33,160.
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:
Descriptions
Number of clients.
Number of computer hours
Number of client transactions.
Information
Systems Services
265
3,250
500
E-Commerce
Consulting
85
2,200
770
Pozy
Total
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 activity-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.
350
5,450
1,350
4. Jeffrey Grady, one of the firm's partners, doesn't care where his professionals spend their 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 paid the same hourly rate. Should Grady's attitude change?
1 of 4
Next >
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