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HomeLife Life Insurance Company has two service departments (actuarial and premium rating and to production departments (advertising and sales). The distribution of each service department's
HomeLife Life Insurance Company has two service departments (actuarial and premium rating and to production departments (advertising and sales). The distribution of each service department's efforts in percentages) to the other departments shown in the following table: To from Premium Actuarial Rating Actuarial Advertising Sales 10% 1 Premium 15 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 86,000 Premium rating 21, eee Advertising 66,000 Sales 46,00 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 at allocation 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation uring your answers in the tabs below
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