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 20% 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 80,000 Premium rating 15,000 Advertising 60,000 Sales 40,000 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method or 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.

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 Prenium Actuarial Rating Advertising Sales nctuarial Premium 80% 10 20 10 60 208 The direct operating costs of the departments (including both varlable and fixed costs) are: Actuarial 80,000 Premium rating Advertising 60,000 15,000 40,000 Required: 1 Determine the total costs of the advertising and sales departments after using the direct method or allocation. 2. Determine the total costs of the advertising and sales departments after using the step method of alocation 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation