7-29 Departmental Cost Allocation HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribu- tion of each service department's efforts (in percentages) to the other departments is 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 Premium rating Advertising Sales S80,000 15,000 60,000 40,000 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.
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- 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 Actuarial Premium Rating Advertising Sales Actuarial — 80% 10% 10% Premium 25% — 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 99,000 Premium rating 34,000 Advertising 79,000 Sales 59,000 1. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.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 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 $ 80,000 Premium rating 15,000 Advertising 60,000 Sales 40,000 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. What is the…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 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 $ 98,000 Premium rating 33,000 Advertising 78,000 Sales 58,000 Required: 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.
- 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 Actuarial Premium Rating Advertising Sales Actuarial - 70% 15% 15% Premium 20% 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $81,000 Premium rating 16, 000 Advertising 61, 000 Sales 41, 000 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 of allocation. 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.S HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments fadvertising and sales). The distribution of each service department's efforts (in percentages) to the other departments is shown in the following table: From Actuarial Premium Actuarial Premium rating Advertising Sales Actuarial 25% The direct operating costs of the departments (including both variable and fixed costs) are: Premium Rating Advertising 80% 10% 15 Required 1 Required 2 To $ 82,000 17,000 62,000 42,000 Advertising department Sales department 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 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…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 Actuarial Premium Rating Advertising Sales Actuarial - 80% 10% 10% Premium 25% - 15% 60% The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 91,000 Premium rating 26,000 Advertising 71,000 Sales 51,000 Required: 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.
- The Long Term Care Plus Company has two service departments - actuarial and premium rating, and two operations departments - marketing and sales. The distribution of each service department's efforts to the other departments is shown below: FROM Actuarial Rating Actuarial Rating 0% 10% 10% 0% Actuarial Premium Rating Marketing Sales ΤΟ Marketing Sales 10% 80% 40.0% 50.0% The direct operating costs of the departments (including both variable and fixed costs) were as follows: $ 90,000 $160,000 $ 58,000 $ 61,000 The total cost accumulated in the sales department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $103,360 3,200 Network center Number of devices monitored 634,375 8,750 Electronic mail Number of user accounts 78,100 7,100 Smartphone support Number of smartphones issued 144,320 8,200 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: • The sector has 3,000 employees,…Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $133,760 3,200 Network center Number of devices monitored 748,250 10,250 Electronic mail Number of user accounts 70,950 6,450 Handheld technology support Number of handheld devices issued 168,960 9,600 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…
- Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $164,650 3,700 Network center Number of devices monitored 607,950 9,650 Electronic mail Number of user accounts 51,750 5,750 Smartphone support Number of smartphones issued 131,040 9,100 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: • The sector has 2,000 employees,…