Considering dual rate method, if employees work for 8500 budgeted hours at $120 per hour and work for 9500 actual hours at $110 per hour, then total cost would be

The correct answer is $\boxed{\text{C. }2,065,000}$.

The dual rate method is a cost accounting method that uses two rates to calculate the cost of labor: a standard rate and a premium rate. The standard rate is the rate that is used to calculate the cost of labor for the budgeted hours, and the premium rate is the rate that is used to calculate the cost of labor for the actual hours worked.

In this case, the standard rate is $120 per hour, and the premium rate is $110 per hour. The budgeted hours are 8500 hours, and the actual hours worked are 9500 hours.

The total cost of labor is calculated as follows:

• Standard rate × Budgeted hours = $120 × 8500 = $1020,000
• Premium rate × Actual hours worked = $110 × 9500 = $1045,000
• Total cost of labor = $1020,000 + $1045,000 = $2,065,000

Therefore, the total cost of labor is $\boxed{\text{C. }2,065,000}$.

Option A is incorrect because it is the total cost of labor if the standard rate and the actual rate are the same. Option B is incorrect because it is the total cost of labor if the standard rate is used for both the budgeted hours and the actual hours worked. Option D is incorrect because it is the total cost of labor if the premium rate is used for both the budgeted hours and the actual hours worked.