HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and twoproduction departments (advertising and sales). The distribution of each service department's efforts (inpercentages) to the other departments is shown in the following table:ActuarialPremium ratingAdvertisingSalesFromActuarialPremiumThe direct operating costs of the departments (including both variable and fixed costs) are:ActuarialPremiumRating80%25%$ 87,00022,00067,00047,000Advertising departmentSales departmentToAdvertising Sales15%5%15Required 1 Required 2 Required 3Required: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 ofallocation.Complete this question by entering your answers in the tabs below.60Determine the total costs of the advertising and sales departments after using the direct method of allocation.Total Cost AllocatedRequired 1Required 2 >

Overhead allocation summary:The overhead allocation summary indicates the techniques 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: From Actuarial Premium Actuarial Advertising Sales 15% 5% 15 The direct operating costs of the departments (including both varlable and fixed costs) are: Actuarial $ 87,000 Premium rating Advertising Sales 22,000 67,000 47,000 Premium Rating 80% 25% To 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. Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. 60 Determine the total costs of the advertising and sales departments after using the direct method of allocation. Total Cost Allocated Required 1 Required 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 Actuarial Advertising Sales 15% 5% 15 The direct operating costs of the departments (including both varlable and fixed costs) are: Actuarial $ 87,000 Premium rating Advertising Sales 22,000 67,000 47,000 Premium Rating 80% 25% To 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. Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. 60 Determine the total costs of the advertising and sales departments after using the direct method of allocation. Total Cost Allocated Required 1 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...

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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 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 >
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.
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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 $ 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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The Long Term Care Plus 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 Actuarial Rating Actuarial Rating 0% 10% 10% 0% Actuarial Premium Rating Marketing Sales ΤΟ Marketing Sales 10% 80% 40.0% 50.0% The direct operating costs of the departments (including both variable and fixed costs) were as follows: $ 90,000 $160,000 $ 58,000 $ 61,000 The total cost accumulated in the sales department using the reciprocal 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):
Comprehensive Insurance Company has three operating departments: claims processing, administration, and sales. These three operating departments are supported by two service departments: information technology and accounting. The support provided by information technology and accounting to the other departments is shown below. Operating Departments Sales Total costs Information technology Accounting The total costs incurred in the five departments are: Information technology Accounting Claims processing Administration a. Direct Method b. Service Departments Step Method (Info Tech First) Step Method (Accounting First) Information Technology 10% c. Reciprocal Method Accounting 20% $ 579,000 1,580,000 270,000 551,000 600,000 $ 3,580,000 Required: 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 accounting going…
The Long Term Care Plus 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 % 10 % 20 % 70 % Rating 10 % 0 % 40.0 % 50.0 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 80,000 Premium Rating $ 70,000 Marketing $ 40,000 Sales $ 86,000 The total cost accumulated in the sales department using the reciprocal 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): Multiple Choice $89,091 $109,271. $186,909. $129,340. $136,919.
The Long Term Care Plus 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 % 10 % 20 % 70 % Rating 20 % 0 % 40.0 % 40.0 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 70,000 Premium Rating $ 130,000 Marketing $ 56,000 Sales $ 65,000 The total cost accumulated in the marketing department using the reciprocal 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): Multiple Choice $131,510. $151,690. $130,714. $171,759. $179,338.
Solomon Information Services, Incorporated, has two service departments: human resources and billing. Solomon's operating departments, organized according to the special Industry each department serves, are health care, retall, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Number of employees Annual cost Annual revenue Req A1 Human Resources Department Reg A2 Billing Health Care Retail Legal Services Total *This is the operating cost before allocating service department costs. Allocation Rate 20 Req B1 $ 900,000 Complete this question by entering your answers in the tabs below. x X Billing Required a. Allocate service department costs to operating departments, assuming that Solomon adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and…