Question

Soprano 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 1 Department 2 Total Short-run usage (hours) 80,000 120,000 200,000 Long-run usage (hours) 90,000 110,000 200,000 If Soprano uses dual-cost accounting procedures and fixed administrative costs total $1,000,000, the amount of fixed administrative costs to allocate to Department 1 would be:

Answer 1

$850,000

Step-by-step explanation:

Total Hours of Department 1=$80,000+$90,000

=$170,000/$200,000*1000,0000