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:

My results for Required2 are wrong. Please include explanations for each process.

Actuarial From Actuarial Premium To Premium Rating 80 % Advertising 10% 15 Sales 10% 60 25 % The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $ 94,000 29,000 74,000 54,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the step method of allocation Total Cost Allocated $ 99,040 Advertising department Sales department $ 131,960