ances 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: From Actuarial To Actuarial Premium Rating 20% Advertising 10% 20 Sales 10% 60 Premium The direct operating costs of the departments (including both variable and fixed costs) are Actuarial Premium rating Advertising Sales Required: 580,000 15,000 60,000 40,000 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