A firm of lawyers offering one-stop resolution of legal problems?has three types of cases: Regular,...
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Accounting
A firm of lawyers offering one-stop resolution of legal problems?has three types of cases: Regular, Difficult, and Extra Difficult. The firm is organized into departments. Each department is responsible for one of the case types. General firmwide corporate fixed costs include costs that are unavoidable as long as the firm remains in business. In addition, each department also has some direct fixed costs, including costs of support staff employed within each of the departments. The firm's total fixed costs are shown below, along with other information for Year 1:
Variable Fixed Costs Fee per Cost per Cases per Year 1 ($) Case ($) Case ($) Year Regular Department 500,000 3,000 1,800 1,000 Difficult Department 700,000 4,000 2,200 400 Extra Difficult Department 1,000,000 5,000 2,500 600 Corporate 365,000 Total 2,565,000 2,000
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