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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. 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.

FINANCIAL ACCOUNTING
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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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 department after using the reciprocal method of allocation.
CH 07 i zto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fbb.tulsacc.edu%252Fw... I ook 0 rences Mc Graw Hill X M Question 6-QUIZ - CH 07 -C X 33 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: 2 Premium From Actuarial Rating Advertising Sales 80% 15% 5% Premium 15 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 87,000 Premium rating Advertising Sales 22,000 67,000 47,000 S Actuarial 25% 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 W Advertising department Sales department Complete this question by entering your answers in the tabs below. X 3 Determine the total costs of the advertising and sales departments after using the direct method of allocation. 80 E D Required 3 C Cost Allocation in Service Indu x + $ Total Cost Allocated Ad To 4 888 R F < Required 1 % 5 60 V T Saved < Prev G 6 Required 2 > B 6 of 6 MacBook Pro Y & 7 H Next > U N ▶11 * 8 J 1 ( 9 M K O O V L @ Help , || P [ Save C .
Transcribed Image Text:CH 07 i zto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fbb.tulsacc.edu%252Fw... I ook 0 rences Mc Graw Hill X M Question 6-QUIZ - CH 07 -C X 33 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: 2 Premium From Actuarial Rating Advertising Sales 80% 15% 5% Premium 15 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 87,000 Premium rating Advertising Sales 22,000 67,000 47,000 S Actuarial 25% 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 W Advertising department Sales department Complete this question by entering your answers in the tabs below. X 3 Determine the total costs of the advertising and sales departments after using the direct method of allocation. 80 E D Required 3 C Cost Allocation in Service Indu x + $ Total Cost Allocated Ad To 4 888 R F < Required 1 % 5 60 V T Saved < Prev G 6 Required 2 > B 6 of 6 MacBook Pro Y & 7 H Next > U N ▶11 * 8 J 1 ( 9 M K O O V L @ Help , || P [ Save C .
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