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	$	83,000
Premium rating		18,000
Advertising		63,000
Sales		43,000

Required:

1.	Determine the total cost allocated to the advertising and sales departments using the direct method.

2.	Determine the total cost allocated to advertising and sales using the step method.

3.	Determine the total cost allocated to advertising and sales using the reciprocal method. (Round your intermediate calculations to the nearest whole dollar and final answers to 2 decimal places.)

I would like a step by step for all three methods so I can have a good example to go by.