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Exercise 7-28 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
Exercise 7-28 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: Actuarial From Actuarial Premium To Premium Rating Advertising 80 % 10% 20 Sales 10% 60 20 % The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $89,000 24,000 69,000 49,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation. ( round intermediate calculations. Round your final answers to 4 decimal places.) Total Cost Allocated Advertising department Sales department
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