Walters and Witt, a law firm, is analyzing the profitability of its cases. During the year, the firm represented the Umberg Company in numerous routine legal issues, for which it charged a monthly retainer fee of $2,500. Budget information for the firm follows:

Professional labor: Partners $500,000 Associates 900,000 Paralegals 600,000 Total $2,000,000

Overhead: Secretarial salaries $900,000 Depreciation of office equipment 300,000 Fringe benefits 400,000 Lease expense 200,000 Utilities 300,000 Communication expenses 250,000 Office supplies 150,000 Total $2,500,000

Partner, associate, and paralegal hourly salary rates are $100, $60, and $20, respectively.

Actual time spent for the Umberg cases follows:

Actual Partners 23 hours

Associates 42 hours

Paralegals 72 hours

Walters and Witt uses activity-based costing to determine the cost of its cases. With a consultants help, the firm has developed the following information about cost pools:

cost pool Expense included cost allocation base

Secretarial support Secretarial salaries partner labor hours

Fringe benefits fringe benefits professional labor dollars

Office support depreciation, lease, utilities, communications supplies professional labor hours

a. Compute the budgeted rate per unit of cost driver for each cost pool.

b. Using activity-based costing, compute the cost of the Umberg work this year.