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Hi, can you please help me on the second part of B and C please. I have been stuck on this for hours and can't
Hi, can you please help me on the second part of B and C please. I have been stuck on this for hours and can't figure it out. Explanations would be great. Thank you so much.
Problem 7-41 Departmental Cost Allocation; Service Company [LO 7-3, 7-5] Comprehensive Insurance Company has two product lines: health insurance and auto insurance. The two product lines are served by three operating departments which are necessary for providing the two types of products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below. Support Departments Information Technology Operating Departments Claims Processing Administration Operations Sales Information technology Operations 20% 20% 40 20% 10% 10 50 30 The total costs incurred in the five departments are: Information technology Operations Claims processing Administration S 560,000 1,730,000 250,000 599,000 Sales 650,000 $3,789,000 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 operations going first), and (c) the reciprocal method. (Round percentage calculations to 4 decimal places (e.g., 33.3333%). Do not round your intermediate calculations. Round your final answers to nearest whole dollar amount.) Answer is not complete. Operating Departments Claims Processing Administration Sales Total Direct Method Step Method (Info Tech First) Step Method (Operations First) Reciprocal Method $ $ 582,222 1,366,667 3,789,000 1,840,111 a. $ b. $ 1,846,333 1,376,000 $ 3,788,999 566,666 $ $ 995,500 1,741,500 $ 5,346,000 2,609,000 $ 0 C ech Sales o peradions Admis Claigas Cost 173 0000 $19000 50 c0 250 O00 E60, 000- X (20/20) x (40/TO)(20/ (S60,000 COst icch r40,000 140,000 zY0,000 730000 173 voou x 0/40)S cost 50/40 MO) Ope1aten 192222 Total 136 loob 7 S82 222 L840111 Ope ratiens Te ch Admin Sale S laims Costs 510, 000 1730000 250000 (5L0,o) 500000 cOst X (20100) X (40/100) 224ovo 184200O Lost Openat gn x C10 190 ( sO/40 3U/90) 1 2040lale 1023333 So6440 part 2 tech Admin Sales Operahons lams 599000 50,000 136060 S100,000 CostS 1720000 Operaners73o0 00)7300 x(10 /100)x ( 50 JIu X - SI9000 13000 6500D 2290000 229000U x (z0/ F0(40/8u) 20180) (2:4:2) ST2500 S72500 1145000 total 24090 /741 SOD o2A DISEStep by Step Solution
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