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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 TotalShort-run usage (hours) 88,000 128,000 216,000Long-run usage (hours) 98,000 118,000 216,000
Problem 1: If Soprano uses dual-cost accounting procedures and fixed administrative costs total $1,080,000, the amount of fixed administrative costs to allocate to Department 1 would be
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