Please only attempt if you can solve the question with a proper explanation. Please do not copy from Chegg.

HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service departments efforts (in percentages) to the other departments is shown in the following table:

From	Actuarial			Premium Rating			Advertising			Sales
Actuarial					80	%		10	%		10	%
Premium		25	%					15			60

The direct operating costs of the departments (including both variable and fixed costs) are:

Actuarial	$	96,000
Premium rating		31,000
Advertising		76,000
Sales		56,000

Required:

1.	Determine the total cost allocated to the advertising and sales departments using the direct method.
	Advertising- Sales-

2.	Determine the total cost allocated to advertising and sales using the step method.
	Advertising- Sales-

3.	Determine the total cost allocated to advertising and sales using the reciprocal method. Advertising- Sales-