Answered

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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 $ 35,000​
Premium Rating $ 20,000​
Marketing $ 35,000​
Sales $ 45,000​
The total cost accumulated in the sales department using the direct 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):
$65,667.
$78,333.
$56,667.
$91,667.
$74,333.


Sagot :

Parrain

Based on the overheads, the costs of various departments and the reallocation rates, the total cost to sales department is $78,333.

What is the total cost accumulated to the Sales department?

Using the direct method, two thirds of the Actuarial department cost will go to the Sales department because the Sales department is to take two times the cost of the Actuarial department that the Marketing department takes.

The cost of Premium Rating will be shared equally by the service and marketing departments.

The total cost to Sales is therefore:

=  Cost of sales department + (66.7% x Actuarial) + (50% x Premium service)

= 45,000 + (66.7% x 35,000) + (50% x 20,000)

= $78,333.33

In conclusion, option B is correct.

Find out more on departmental cost at https://brainly.com/question/1156860.

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