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:

To

From Actuarial Premium Rating Advertising Sales

Actuarial $70\%15\%15\%$

Premium $20\%2060$

The direct operating costs of the departments $($including both variable and fixed costs$)$ are:

Actuarial $ $85,000$

Premium rating $20,000$

Advertising $65,000$

Sales $45,000$

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.