Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $108,000. Sales for its operating departments follow. Department 1 2 3 Sales $ 272,500 523, 200 294,300 How much advertising cost is allocated to each operating department if the allocation is based on departmental sales? (Do not round your intermediate calculations.) Department Sales Percent of Total 1 2 3 Total % % % % Cost Allocated

Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $108,000. Sales for its operating departments follow. Department 1 2 3 Sales $ 272,500 523, 200 294,300 How much advertising cost is allocated to each operating department if the allocation is based on departmental sales? (Do not round your intermediate calculations.) Department Sales Percent of Total 1 2 3 Total % % % % Cost Allocated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 20% To Actuarial $80,000 Premium 15,000 rating Advertising 60,000 Sales 40,000 Premium Rating Advertising Sales 808 108 10% 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: 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.
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A1
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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 - 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.
I am unsure how to figure the percent of total from the advertising costs?
Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $146,000. Sales for its operating departments follow. Department 1 2 3 Sales $ 321,000 492,200 256,800 How much advertising cost is allocated to each operating department if the allocation is based on departmental sales? Note: Do not round your intermediate calculations. Department 1 Sales Percent of Total Cost Allocated % 2 % 3 % Total $ 0 0.00 % $ 0
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 — 75 % 10 % 15 % Premium 20 % — 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 88,000 Premium rating 23,000 Advertising 68,000 Sales 48,000 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.
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