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The Long Term Care Plus Company has two service departments — actuarial and premium rating, and...

The Long Term Care Plus Company has two service departments — actuarial and premium rating, and two operations departments — marketing and sales. The distribution of each service department's efforts to the other departments is shown below:

FROM TO
Actuarial Rating Marketing Sales
Actuarial 0 % 10 % 20 % 70 %
Rating 20 % 0 % 30.0 % 50.0 %

The direct operating costs of the departments (including both variable and fixed costs) were as follows:

Actuarial $ 80,000
Premium Rating $ 120,000
Marketing $ 71,000
Sales $ 75,000

The total cost accumulated in the marketing department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

  • $131,408.

  • $151,588.

  • $150,918.

  • $171,657.

  • $179,236.

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Answer #1

Ans: $ 1,31,408

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