Nichols Corporation Allocates Administrative Costs on the Basis of Staff

question 60

Multiple Choice

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.

Variable 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) $301,600.
• B) $307,000.
• C) $313,600.
• D) $319,000.
• E) None of the answers is correct.

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Definitions:

Cultural Conflict

Disagreements or misunderstandings arising from differences in cultural backgrounds, values, or practices among individuals or groups within a project.

Risk Taking

The action of engaging in behaviors that involve some level of risk, often with the potential for significant reward.

External Attribute

An external attribute is a characteristic or feature of an object or system that can be observed or measured without changing its internal state.

Project Size

An attribute of a project that signifies its magnitude, often measured in terms of cost, duration, complexity, or the number of resources involved.