Kind, Meek, and Clean, attorneys-at-law, specialize in three areas: criminal, civil, and family law. When specifications for a new computer system were established, the partners agreed to allocate usage based on each department's needs. Criminal law division needed 60% of the capacity, civil law 25%, and family law 15%. Variable costs for the computer department would be allocated on the number of computer minutes each division used. The computer department's budgeted fixed costs are $700,000, and the budgeted variable costs $150,000. The firm estimates that 400,000 minutes of computer time will be used year.

What amount of the computer department's fixed costs will be allocated to the civil and family law divisions, respectively?

A. $37,500 and $22,500.

B. $175,000 and $105,000.

C. $233,333 and $233,333.

D. $212,500 and $ 127,500.

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Calculation of Computer cost allocati... View the full answer