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Question - Chilton Day School allocates marketing and administrative costs to its three schools on the basis of each school's annual tuition revenue (as a percentage of the total). Last year the allocations (000$ omitted) were as follows:
Preschool
Middle School
High School
Total
Tuition revenue
$1,590
$1,890
$2,290
$5,770
Marketing and administration
320
370
445
1,135
In the current year, the middle and high schools experienced no change in revenues, but the preschool's tuition revenue increased to $1.99 million. Marketing and administrative costs rose to $1,340,000.
Required - Using revenue as an allocation base, how much current year cost will be allocated?
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