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Please show your work, I will need to know how to do this. Thanks HomeLife Life Insurance Company has two service departments (actuarial and premium
Please show your work, I will need to know how to do this. Thanks
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 From Actuaria Actuarial Premium 20% Premium Rating Advertising 80% 10% Sales 10% l 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $89,000 24,000 69,000 49,000 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.)Step by Step Solution
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