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Better Health Company has two service departments - actuarial and premium rating, and two operations departments-marketing and sales. The distribution of each service department's
Better Health 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: TO FROM Actuarial Actuarial Rating 0% 25% Rating 40% Marketing Sales 20% 0% 37.5% 40% 37.5% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial Premium Rating Marketing Sales $ 60,000 $ 40,000 $ 60,000 $ 70,000 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): Multiple Choice $102,222 $122,402. $127,778. $142,471. $150,050.
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