Nichols Corporation allocates administrative costs on the basis of staff hours. Short-run monthly usage and anticipated long-run monthly usage of staff hours for Operating Departments 1 and 2 follow. Department 1Department 2TotalShort-run usage (hours)45,00055,000100,000Long-run usage (hours)48,00052,000100,000Variable and fixed administrative costs total $180,000 and $400,000, respectively. If Nichols uses dual-cost accounting procedures, the total amount of administrative cost to allocate to Department 2 would be:
A. $307,000.
B. $319,000.
C. $313,600.
D. $301,600.
E. None of the answers is correct.
Answer: A
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