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HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service departments

HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service departments efforts (in percentages) to the other departments is shown in the following table: To From Actuarial Premium Rating Advertising Sales Actuarial 80 % 10 % 10 % Premium 25 % 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 100,000 Premium rating 35,000 Advertising 80,000 Sales 60,000 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method or allocation. 2

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