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 $175,000 per year and a budgeted variable rate of $61 per hour of professional time. The normal 

usage of the legal services center is 3,010 hours per year for the Yuma office and 1,290 hours per year for the Bernalillo office. This corresponds to the expected usage for the coming year.

 

Required:

1. Determine the amount of legal services support center costs that should be assigned to each office. In your computations, carry ratio values out to two decimal places. Round your final answers to the nearest dollar if rounding 

is required.

 

Yuma $____.

Bernalillo $____.

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 $177,100 and actual variable costs of $245,410. It delivered 4,010 hours of professional time2,500 hours to Yuma and 1,510 hours to 

Bernalillo.

 

Determine the amount of the legal services center's costs that should be allocated to each office.

Yuma $____.

Bernalillo $____.

4. Did the costs allocated differ from the costs incurred by the legal services center?________.

If so, why?________.

Answer rating: 100% (QA)

1 To determine the amount of legal services support center costs that should be assigned to each office Yuma Fixed costs allocated Fixed costs Total budgeted hours Yumas budgeted hours Fixed costs all... View the full answer