2. 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 Rating Advertising Sales

Actuarlial --- 70% 15% 15%

Premium 20% --- 20 60

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

Actuarial	$	97,000
Premium rating		32,000
Advertising		77,000
Sales		57,000

Required:

1.	Determine the total cost allocated to the advertising and sales departments using the direct method.
	Advertising Dep __________ Sales Dep _______________
2.	Determine the total cost allocated to advertising and sales using the step method.

Advertising Dep __________

Sales Dep _______________

3.	Determine the total cost allocated to advertising and sales using the reciprocal method. (Round your intermediate calculations to the nearest whole dollar and final answers to 2 decimal places.)

Advertising Dep __________

Sales Dep _______________