FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 10 %   0 %   40.0 %   50.0 %
 

 

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

 

     
Actuarial $ 80,000
Premium Rating $ 70,000
Marketing $ 40,000
Sales $ 86,000
 

 

The total cost accumulated in the sales 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):

 

 

Multiple Choice
  •  

    $89,091

  •  

    $109,271.

  •  

    $186,909.

  •  

    $129,340.

  •  

    $136,919.

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