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...
icon
Related questions
Question
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 3
Required 1
Required 2 Required 3
Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.
Reciprocal Method
Advertising department
Total Cost
Allocated
Sales department
Transcribed Image Text: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 3 Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Reciprocal Method Advertising department Total Cost Allocated Sales 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 in
the following table:
From
Actuarial
Premium
To
Actuarial Premium Rating
Advertising
Sales
80%
10%
10%
20%
20
60
The direct operating costs of the departments (including both variable and fixed costs) are:
Actuarial
$ 83,000
Premium rating
18,000
63,000
43,000
Advertising
Sales
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Determine the total costs of the advertising and sales departments after using the direct method of allocation.
Direct Method
Total Cost
Allocated
Advertising department
Sales department
Required 1
Required 2 >
Transcribed Image Text: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 Advertising Sales 80% 10% 10% 20% 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 83,000 Premium rating 18,000 63,000 43,000 Advertising Sales Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the direct method of allocation. Direct Method Total Cost Allocated Advertising department Sales department Required 1 Required 2 >
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning