Homelife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distrıbution of each service department's efforts (in percentages) to the other departments is shown in the following table: To Premium Rating s0% From Actuarial Advertising Sales 10% Actuarial Premium 10% 25% 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: $ 94,000 29,000 74,e00 54, 800 Actuarial Premium rating Advertising Sales 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 Advertising department Sales department
Homelife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distrıbution of each service department's efforts (in percentages) to the other departments is shown in the following table: To Premium Rating s0% From Actuarial Advertising Sales 10% Actuarial Premium 10% 25% 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: $ 94,000 29,000 74,e00 54, 800 Actuarial Premium rating Advertising Sales 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 Advertising department Sales department
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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. (Do not
round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
Total Cost
Allocated
Advertising department
Sales department
Transcribed Image Text:Homelife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments
(advertising and sales). The distrıbution of each service department's efforts (in percentages) to the other departments is shown in the
following table:
To
Premium
Rating
s0%
From
Actuarial
Advertising Sales
10%
Actuarial
Premium
10%
25%
15
60
The direct operating costs of the departments (including both variable and fixed costs) are:
$ 94,000
29,000
74,e00
54, 800
Actuarial
Premium rating
Advertising
Sales
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
Advertising department
Sales department
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