Question
The Long Term Care Plus Company has two service departments - actuarial and premium rating, and two operations departments - marketing and sales. The distribution
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:
Actuarial | Rating | Marketing | Sales | |
Actuarial | 0% | 10% | 10% | 80% |
Rating | 20% | 0% | 30% | 50% |
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Actuarial | $10,000 |
Premium Rating | $200,000 |
Marketing | $62,000 |
Sales | $67,000 |
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 amount to the nearest whole dollar):
a: $128,633
b: $148,813
c: $210,367
d: $168,882
e: $176,461
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