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 |
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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 | $ | 92,000 |
Premium rating | 27,000 | |
Advertising | 72,000 | |
Sales | 52,000 | |
Required:
1. Determine the total costs of the advertising and sales departments after using the step method of allocation.
Allocation
Actuarial | Premium rating | Advertising | Sales | Total | |
Direct operating cost | 92000 | 27000 | 72000 | 52000 | 243000 |
Allocation of actuarial | -92000 | 73600 | 9200 | 9200 | |
Allocation of premium rating | 0 | -100600 | 25150 | 75450 | |
Total cost | 0 | 0 | 106350 | 136650 | 243000 |
HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments...
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 $ 92,000 Premium rating 27,000 Advertising...
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 % 15 % 5 % Premium 25 % — 15 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 87,000 Premium rating 22,000 Advertising...
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...
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:ToFromActuarialPremium RatingAdvertisingSalesActuarial-80%10%10%Premium20%-2060The direct operating costs of the departments (including both variable and fixed costs) are:Actuarial$89,000Premium rating24,000Advertising69,000Sales49,000Required: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...
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: То Actuarial Premium Rating Advertising 80 % 25 % From Actuarial Premium Sales 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $87,000 22,000 67,000 47,000 Required: 1. Determine the total...
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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: From Actuarial Premium To Actuarial Premium Rating Advertising 80 % 15% 25 % 15 Sales 5% 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $ 84,000 19,000 64,000 44,000 Required:...
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: From Actuarial Premium To Actuarial Premium Rating Advertising 80 % 15% 25 % 15 Sales 5% 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $84,000 19,000 64,000 44,000 Required: 1....
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