Required 1 Required 2 Required 3Determine the total costs of the advertising and sales departments after using the step method of allocation.Step MethodTotal CostAllocatedAdvertising departmentSales department 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 inthe following table:FromActuarialPremiumToActuarial Premium RatingAdvertisingSales80%10%10%20%2060The direct operating costs of the departments (including both variable and fixed costs) are:Actuarial$ 83,000Premium rating18,00063,00043,000AdvertisingSalesComplete this question by entering your answers in the tabs below.Required 1 Required 2Required 3Determine the total costs of the advertising and sales departments after using the direct method of allocation.Direct MethodTotal CostAllocatedAdvertising departmentSales departmentRequired 1Required 2 >

Step 1: Initial Setup and PurposeIn this step, we identify the departments involved (service and…

Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the step method of allocation. Step Method Total Cost Allocated Advertising department Sales department

Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the step method of allocation. Step Method Total Cost Allocated Advertising department Sales department

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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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: Actuarial Premium rating Advertising Sales From Actuarial Premium The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium Rating 80% 25% $ 87,000 22,000 67,000 47,000 Advertising department Sales department To Advertising Sales 15% 5% 15 Required 1 Required 2 Required 3 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method of 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. Complete this question by entering your…
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: To From Actuarial Premium Rating Advertising Sales Actuarial - 70% 15% 15% Premium 20% 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $81,000 Premium rating 16, 000 Advertising 61, 000 Sales 41, 000 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method of 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.
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: To From Actuarial Premium Rating Advertising Sales Actuarial — 80% 10 % 10 % Premium 20% — 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 80,000 Premium rating 15,000 Advertising 60,000 Sales 40,000 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. What is the…
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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: To From Actuarial Premium Rating Advertising Sales Actuarial — 80% 10% 10% Premium 25% — 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 99,000 Premium rating 34,000 Advertising 79,000 Sales 59,000 1. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.
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: To From Actuarial Premium Rating Advertising Sales Actuarial - 80% 10% 10% Premium 25% - 15% 60% The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 91,000 Premium rating 26,000 Advertising 71,000 Sales 51,000 Required: 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.
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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 Actuarial Actuarial Premium rating Advertising Sales Premium Rating 80% To 4 20% The direct operating costs of the departments (including both variable and fixed costs) are $ 92,000 27,000 72,000 52,000 Advertising Sales 10% 10% 60 20 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method of allocation 2. Determine the total costs of the ad 2
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 Premium Rating 70% Actuarial 20% The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 81,000 Premium rating Advertising Sales 16,000 61,000 41,000 Advertising sales, 15% 20 15% 60 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method of 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.
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Better Health 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 $ 75,000 Premium Rating $ 50,000 Marketing $ 75,000 Sales $ 85,000 The total cost accumulated in the marketing department using the step method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar; assume the actuarial department goes first): Multiple Choice a)$155,000. b)$130,000. c)$159,000. d)$164,000. e)$126,000.