Problem 1

	The Long Term Care Plus Company has two service departments actuarial and premium rating, and two production departments marketing and sales. The distribution of each service department's efforts to the other departments is shown below: Actuarial Rating Marketing Sales Actuarial 0% 40% 20% 40% Rating 25% 0% 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

Required:

Determine the total cost allocated to the Marketing and Sales Department using the direct method. - Must show all calculations