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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: Actuarial From Actuarial Premium To Premium Rating Advertising 80% 10% 15 Sales 10% 60 25% The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial Premium rating Advertising Sales $ 82,000 17,000 62,000 42,000 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. Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the direct method of allocation. Total Cost Allocated Advertising department Sales department Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the step method of allocation. Total Cost Allocated Advertising department Sales department Required 1 Required 2 Required 3 Determine the total costs of the advertising and sales departments after using the step method of allocation. Total Cost Allocated Advertising department Sales department

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