HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service department's efforts (in percentages) to the other departments is shown in the following table: From Actuarial Premium To Actuarial Premium Rating 20% Actuarial Premium rating Advertising Sales 80% The direct operating costs of the departments (including both variable and fixed costs) are: $80,000 15,000 60,000 40,000 Advertising Sales 10% 20 10% 60 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method or allocation. 2. Determine the total costs of the advertising and sales departments after using the step method of allocation. 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.

Q: Explain the differences between a PPO and an HMO.

A: The question is based on the concept of different types of health insurance policy and their…

Q: Define carried interest

A: Carried interest: It could be a portion of any profit that private equity and hedge reserves common…

Q: How is ARR calculated?

A: ARR: Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a…

Q: Define Assigning.

A: Assigning is a process of assignment. Assignment means a transfer of a right to receive a…

Q: The  Algebraic/reciprocal method

A: Lets understand the basics. There are various method through which service department costs gets…

Q: Define geometric-gradient-series?

A: When there is a change in the cash flows series whether it is positive or negative then the series…

Q: Explain NAREIT Index?

A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…

Q: What is factoring?

A: Accounts receivable: It can be defined as the amount owed by the customers from the business for the…

Q: Explain put–call parity relationship

A: Put-Call parity is the concept that defines the relationship between price of European call option…

Q: What is a limit order?

A: Limit order It is such an order to buy or trade a security at or superior to a predefined cost. The…

Q: What is GAAP in Full

A: GAAP is a combination of set of different policy standards

Q: Formula for put call parity?

A: Put call parity Put-Call parity defines the value of same class European put and call options. Put…

Q: How is RI calculated?

A:

Q: Distinguish between cumulative or noncumulative?

A: cumulative and noncumulative preferred is assumed since the key term is not given.

Q: Define split-off point.

A: Contribution approach: The contribution approach calculates the net profit by calculating the…

Q: Define characteristic line

A: Characteristic line is a graphical representation of alpha (α) where alpha is the difference between…

Q: What is forward points?

A: Forward points are nothing but basis points added or subtracted from the spot rate of an underlying…

Q: What is a cfar?

A: Cash Flow at Risk (CFAR):Cash Flow at Risk is a term which focuses on the risk of receivables and…

Q: Define collection policy

A: Introduction: A mutual responsibility between the operating departments, accounts receivables is to…

Q: Define Profi t and loss (P&L) statement

A: Introduction: The financial statement is a detailed analysis of the financial situation of the…

Q: provide answer with explantion

A: student provide question as link please I am unable to see question for this definitely I will share…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.