Soprano Corporation Allocates Administrative Costs on the Basis of Staff

question 68

Multiple Choice

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.

If Soprano uses dual-cost accounting procedures and fixed administrative costs total $1,000,000, the amount of long-run cost to allocate to Department 1 would be:

• A) $400,000.
• B) $450,000.
• C) $500,000.
• D) $850,000.
• E) None of the answers is correct.

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Definitions:

Type B Behavior Pattern

A cluster of characteristics—including being relaxed and easygoing—that is related to a lower incidence of heart disease.

Heart Disease

A range of conditions affecting the heart, including coronary artery disease, heart rhythm problems, and heart defects.

Type A Behavior Pattern

A personality type characterized by high stress levels, impatience, aggressiveness, and a sense of urgency.

Competitive

Having a strong desire to succeed or win in a situation, often by comparing oneself to or directly contesting with others.