Vala Comprehensive Insurance Company has two product lines: health insurance and auto insurance. The two product lines are served bythree operating departments, which are necessary for providing the two types of products: claims processing, administration, andsales. These three operating departments are supported by two departments: information technology and operations. The supportprovided by information technology and operations to the other departments is shown below.Operating DepartmentsInformation technologyOperationsThe total costs incurred in the five departments are:Information technologyOperationsclaims processingAdministrationSalesa.b.Total costsC.Support DepartmentsInformationTechnology Operations20%IONDirect MethodStep Method (Info Tech First)Step Method (Operations First)Reciprocal Method$ 576,0001,700,000320,000584,000550,000$3,730,000Required:Determine the total costs in each of the three operating departments, after departmental allocations, using (a) the direct method, (b)the step method (first for information technology going first in the allocation and then for operations going first), and (c) the reciprocalmethod. (Do not round intermediate calculations. Round final answers to the nearest dollar.)ClaimsProcessing Administration20%40%1050$$Answer is not complete.Operating DepartmentsAdministrationClaims ProcessingSales800,000 $ 2,150,000 $ 1,400,000 $$ 2,156,667 $ 1,410,000 $783,333$Sales20830Total4,350,0004,350,00000

Lets understand the basics.In direct method, service department costs are allocated to production…

Comprehensive Insurance Company has two product lines: health insurance and auto insurance. The two product lines are served three operating departments, which are necessary for providing the two types of products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below. Operating Departments Information technology Operations claims processing Administration Information technology Operations The total costs incurred in the five departments are: Sales Support Departments Total costs Information Technology Operations 20% 10% $ 576,000 1,700,000 320,000 584,000 550,000 $3,730,000 Claims Processing Administration 208 40% 10 50 Sales 20% 30 Required: Determine the total costs in each of the three operating departments after departmental allocations uring (a) the