HW07 Problems Q1. CareMark Insurance Company has two service lines, health insurance and auto insurance. The two product lines are served by three operating departments which are necessary for providing the two types of services claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and facilities. The support provided by information technology and facilities to the other departments is shown below: mon Technology Factles 30% The total costs incurred in the five departments are Information Technologies Facilities Claims Processing Administration Sales Total Costs $600,000 $1,800,000 $345,000 $875,000 $555,000 $4,175,000 30% 20% 20% Required Allocate the $4.175,000 total departmental costs to the three operating departments using (a) the direct method, (b) the step method (for both information technology and facilities going first in the allocation), and (c) the reciprocal method Q2 Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $420,000 for a standard production run that generates 180,000 gallons of Smooth Skin and 120,000 gallons of Silken Skin. Smooth Skin sells for $2.40 per gallon, while Silken Skin sells for $3.90 per gallon Required 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin on the sales value basis? 2. If not additional costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin on the physical measure method basis?, 3. If additional processing costs beyond the split-off point are $1.40 per gallon for MacBook Pro