Long Term Care Plus Company has two service departments: actuarial and premium rating, and two operations departments:
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Question:
Long Term Care Plus Company has two service departments: actuarial and premium rating, and two operations departments: marketing and sales. The distribution of the efforts of each service department to the other departments is shown below:
Actuarial | Classification | Marketing | Sales | |
Actuarial | 0% | 40% | 20% | 40% |
Classification | 25% | 0% | 37,5% | 37.5% |
The direct operating costs of the departments (including fixed and variable costs) were as follows:
Actuarial | $60,000 |
Premium Qualification | $40,000 |
Marketing | $60,000 |
Sales | $70,000 |
Calculate cumulative total cost in the sales department using the reciprocal method .
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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