Question 3

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	%		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	$	82,000
Premium Rating	$	50,000
Marketing	$	82,000
Sales	$	92,000

The total cost accumulated in the sales 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 that the actuarial department goes first):

Multiple Choice

• $135,800.

• $139,800.

• $166,200.

• $170,200.

• $175,200.

Marin Products produces three products DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Marin's production, sales, and costs follows.

	DBB-1			DBB-2			DBB-3			Total
Units Sold		17,000			26,000			38,000			81,000
Price (after addtl processing)	$	25		$	10		$	35
Separable Processing cost	$	117,000		$	47,000		$	70,000		$	234,000
Units Produced		17,000			26,000			38,000			81,000
Total Joint Cost										$	3,800,000
Sales Price at Split-off	$	20		$	30		$	50

The amount of joint costs allocated to product DBB-1 using the physical measure method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Multiple Choice

• $10,850.

• $797,620.

• $1,782,580.

• $9,840.

• $1,219,800.