Allocation: Fixed and Variable Costs, Budgeted Fixed and Variable Costs

Biotechtron, Inc., has two research laboratories in the Southwest, one in Yuma, Arizona, and the other in Bernalillo, New Mexico. The owner of Biotechtron centralized the legal services function in the Yuma office and had both laboratories send any legal questions or issues to the Yuma office. The legal services support center has budgeted fixed costs of $$160,000$ per year and a budgeted variable rate of $$65$ per hour of professional time. The normal usage of the legal services center is $2,600$ hours per year for the Yuma office and $1,400$ hours per year for the Bernalillo office. This corresponds to the expected usage for the coming year.