The Long Term Care Plus Company has two service departments – actuarial and premium rating, and two operationsdepartments – marketing and sales. The distribution of each service department's efforts to the other departments isshown below:FROMтоActuarial Rating Marketing Sales0$Actuarial40%20%40%Rating25%0융37.5%37.5%The direct operating costs of the departments (including both variable and fixed costs) were as follows:Actuarial$60,000Premium Rating$40,000Marketing$60,000Sales$70,000The total cost accumulated in the marketing department using the step method is (calculate all ratios andpercentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar;assume the actuarial department goes first):

Step method of cost allocation : This is the method of allocating costs of one department to the…

Answered: 40$ 20% 40$ 0용 37.5% 37.5% i the…

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40$ 20% 40$ 0용 37.5% 37.5% i the departments (including both variable anc

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

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
то
Actuarial Rating Marketing Sales
0$
Actuarial
40%
20%
40%
Rating
25%
0융
37.5%
37.5%
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Actuarial
$60,000
Premium Rating
$40,000
Marketing
$60,000
Sales
$70,000
The total cost accumulated in the marketing department using the step 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;
assume the actuarial department goes first):

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