$1$

Exercise $7-28($Static$)$ Departmental Cost Allocation $[$LO $7-3,7-5]$

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:

$\backslash$table$[[,$To$],[,,$Premium,,,$],[$From$,$Actuarial,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:

References

$\backslash$table$[[$Actuarial$,$$$80,000$