Happy Housekeepers, Inc., has two offices in the Pacific Northwest, one in Portland and one in Spokane. The owner of Happy Housekeepers centralized the accounting function in the Portland office and had both offices transmit data to the Portland office via com¬

puter terminals. The accounting support center has budgeted fixed costs of $40,000 per year and a budgeted variable rate of $15 per hour of accounting time. The normal usage of the accounting support center is 1,210 hours per year for the Portland office and 990 hours per year for the Spokane office. This corresponds to the expected usage for the com¬

ing year.

Required:

1. Determine the amount of accounting support center costs that should be assigned to each office.

2. Since the offices produce services, not tangible products, what purpose is served by al¬

locating the budgeted costs?