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Gandolf Corporation allocates administrative costs on the basis of staff hours. Short-run monthly usage and...

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Accounting

Gandolf 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. Dept.1 Dept.2 Total Short-run usage(hours) 40,000 60,000 100,000 Long-run usage(hours) 45,000 55,000 100,000 If Gandolf uses dual-cost accounting procedures and variable administrative costs total $200,000, the amount of variable administrative cost to allocate to Department 1 would be: A.$80,000. B.$85,000. C.$90,000. D.$100,000. E.None of the other answers are correct.

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