Nash Corporation Allocates Administrative Costs on the Basis of Staff

question 39

Multiple Choice

Nash 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. $$\begin{array} { l l l l } & \underline {\text { Dept. 1 }} & \underline {\text { Dept. 2 }} & \underline { \text { Total } } \\\text { Short-run usage (hours) } & 45,000 & 55,000 & 100,000 \\\text { Long-run usage (hours) } & 48,000 & 52,000 & 100,000\end{array}$$ Variable and fixed administrative costs total $180,000 and $400,000, respectively. If Nash 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 other answers are correct.

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Definitions:

Smooth Muscle

A type of muscle found in the walls of internal organs and blood vessels that is not under conscious control.

Arrector Pili

Small muscles attached to hair follicles in mammals; their contraction causes hair to stand up, known as "goosebumps."

Voluntary Control

The conscious regulation of skeletal muscles and movements by the brain, permitting actions like walking, speaking, and grabbing.

Nervous Tissue

Specialized tissue that makes up the central and peripheral nervous systems, consisting of neurons and supporting cells, responsible for transmitting nerve signals.