HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments...
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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 25% Premium Rating 80% To Advertising 10% 15 Sales 10% 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 86,000 Premium rating Advertising Sales 21,000 66,000 46,000 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. Determine the total costs of the advertising and sales departments after using the step method of allocation. Total Cost Allocated Advertising department Sales department 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.) Advertising department Sales department Total Cost Allocated 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 25% Premium Rating 80% To Advertising 10% 15 Sales 10% 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 86,000 Premium rating Advertising Sales 21,000 66,000 46,000 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. Determine the total costs of the advertising and sales departments after using the step method of allocation. Total Cost Allocated Advertising department Sales department 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.) Advertising department Sales department Total Cost Allocated
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Answer rating: 100% (QA)
Advertising Department Sales Department Service distribution Actuarial Premium 1 Direct Allocation D... View the full answer
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
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