HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments fadvertising 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 Premium rating Advertising Sales Actuarial 25% To Premium Rating The direct operating costs of the departments (including both variable and fixed costs) are: Advertising department Sales department $ 82,000 17,000 62,000 42,000 Advertising Sales 10% 100% 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. 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. Total Cost Allocated Required 2 >
HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments fadvertising 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 Premium rating Advertising Sales Actuarial 25% To Premium Rating The direct operating costs of the departments (including both variable and fixed costs) are: Advertising department Sales department $ 82,000 17,000 62,000 42,000 Advertising Sales 10% 100% 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. 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. Total Cost Allocated Required 2 >
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...
Related questions
Question
Transcribed Image Text:S
HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments
fadvertising 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
Premium rating
Advertising
Sales
Actuarial
25%
The direct operating costs of the departments (including both variable and fixed costs) are:
Premium
Rating Advertising
80%
10%
15
Required 1 Required 2
To
$ 82,000
17,000
62,000
42,000
Advertising department
Sales department
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 answers in the tabs below.
Sales
10%
60
Required 3
Sovend
Determine the total costs of the advertising and sales departments after using the direct method of allocation.
Total Cost Allocated
Required 2 >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
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 …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
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 …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,