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: То Premium Actuarial Rating 80% From Advertising Sales Actuarial 15% 5% Premium 25% 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising $ 84,000 19,000 64,000 44,000 Sales 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. 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: То Premium Actuarial Rating 80% From Advertising Sales Actuarial 15% 5% Premium 25% 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising $ 84,000 19,000 64,000 44,000 Sales 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.
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1 Direct Method Production de partment Service department P... 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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