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Responsibility for managing the entire company

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Birnbrey & Bogart Legal Services Birnbrey & Bogart Legal Services is a large law office in St. Louis. It is organized into three operating departments: Criminal, Civil, and Personal & Family Services. Support functions include a secretarial pool and a research center.

An administrative function is responsible for managing the entire company. Birnbrey & Bogart follows the practice of allocating support functions to the three operating departments in order to establish a cost-based charge for pricing the various legal services to clients.
 
Administrative costs are not allocated.But they are recovered through the profit margin developed as a percentage of all other costs. Budgeting for the upcoming fiscal year has resulted in the following costs charged directly to all functions and departments: Secretarial Research Criminal Civil Personal & Family Salaries and wages $80,000 $120,000 $300,000 $400,000 $100,000 Fringe benefits 5,600 11,200 30,000 40,000 10,000 Depreciation 8,000 16,000 24,000 32,000 8,000 Supplies 16,000 3,200 4,500 6,000 1,500 The indirect costs that are prorated to administration, support functions, and operating departments are of four varieties: insurance, leasing, utilities, and janitorial services. The following means are used to prorate indirect costs: a. Insurance costs ($160,000) are for malpractice coverage and for equipment, fixtures, and furniture.

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