Biotechtron, Inc., has two research laboratories in the Southwest, one in Yuma, Arizona, and the other in
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1. Determine the amount of legal services support center costs that should be assigned to each office.
2. Since the offices produce services, not tangible products, what purpose is served by allocating the budgeted costs?
3. Now, assume that during the year, the legal services center incurred actual fixed costs of $163,000 and actual variable costs of $272,400. It delivered 4,180 hours of professional time-2,580 hours to Yuma and 1,600 hours to Bernalillo. Determine the amount of the legal services center's costs that should be allocated to each office. Explain the purposes of this allocation.
4. Did the costs allocated differ from the costs incurred by the legal services center? If so, why?
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1111824402
2nd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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