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Comprehensive Insurance Company has three operating departments: claims processing, administration, and sales. These three operating departments are supported by two service departments: information technology and
Comprehensive Insurance Company has three operating departments: claims processing, administration, and sales. These three operating departments are supported by two service departments: information technology and accounting. The support provided by information technology and accounting to the other departments is shown below.
Service Departments Operating Departments
Information Technology Accounting Claims Processing Administration Sales
Information technology
Accounting
The total costs incurred in the five departments are:
Information technology $
Accounting
Claims processing
Administration
Sales
Total costs $
Required:
Determine the total costs in each of the three operating departments, after departmental allocations, using a the direct method, b the step method first for information technology going first in the allocation and then for accounting going first and c the reciprocal method. Do not round intermediate calculations. Round final answers to the nearest dollar.
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