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Comprehensive Insurance Company has two product 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 products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below. Support DepartmentsOperating DepartmentsInformation TechnologyOperationsClaims ProcessingAdministrationSalesInformation technology—20%20%40%20%Operations10%—105030 The total costs incurred in the five departments are: Information technology$ 560,000Operations1,730,000Claims...
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Exercise 7-28 Departmental Cost Allocation (LO 7-3, 7-5] 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: Actuarial From Actuarial Premium To Premium Rating 80 % Advertising Sales 10% 10% 1560 25 % The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising...
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Problem 7-38 Departmental Cost Allocation (LO 7-3] Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June: Required: What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Round percentage calculations to 4 decimal places (e.g., 33.3333%), do not round intermediate calculations and round your final answers to...
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Problem 7-38 Departmental Cost Allocation (LO 7-3] Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June: Service Departments Maintenance Utilities Overhead costs incurred $513,000 $ 708,000 Service provided to departments Maintenance 5% Utilities 10% Producing-A 20 40 Producing-B 70 55 Totals 100% 100% Required: What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the...
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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: ToFromActuarialPremium RatingAdvertisingSalesActuarial—80%10%10%Premium20%—2060 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial$ 80,000Premium rating15,000Advertising60,000Sales40,000 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...
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74 7 method (2) the step method maintenance Denartmental Cost Allocation Data Performance per of has three major functional areas: computer programming informatie software training. Carol Bingham, a pricing analyst in the accou asked to develop total costs for the functional areas. These costs will be ing a new contract. In computing these costs, Carol is considering three departmental allocation approach to allocate overhead costs: the direct and the reciprocal method. She assembled the following data from the information systems...
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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: 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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BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
6 BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of...
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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:...
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BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
28
46
26
Transactions
40,000
–
24,000
96,000
Department direct costs
$
353,000
$
146,000
$
945,000
$
3,640,000
Required:
a. Allocate the cost of the service departments
to the operating...
Exercise 7-28 Departmental Cost Allocation (LO 7-3, 7-5] 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: Actuarial From Actuarial Premium To Premium Rating 80 % Advertising Sales 10% 10% 1560 25 % The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising...
Problem 7-38 Departmental Cost Allocation (LO 7-3] Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June: Service Departments Maintenance Utilities Overhead costs incurred $513,000 $ 708,000 Service provided to departments Maintenance 5% Utilities 10% Producing-A 20 40 Producing-B 70 55 Totals 100% 100% Required: What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the...
74 7 method (2) the step method maintenance Denartmental Cost Allocation Data Performance per of has three major functional areas: computer programming informatie software training. Carol Bingham, a pricing analyst in the accou asked to develop total costs for the functional areas. These costs will be ing a new contract. In computing these costs, Carol is considering three departmental allocation approach to allocate overhead costs: the direct and the reciprocal method. She assembled the following data from the information systems...
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...
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
6 BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of...
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:...