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.

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.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 6E: Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing...

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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 20 % — 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 95,000 Premium rating 30,000 Advertising 75,000 Sales 55,000 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.
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 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.
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 $ 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.
Better Health 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 TO Actuarial Rating Marketing Sales Actuarial 0% 40% 20% 40% Rating 25% 0% 37.5% 37.5% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 75,000 Premium Rating $ 50,000 Marketing $ 75,000 Sales $ 85,000 The total cost accumulated in the marketing department using the step 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; assume the actuarial department goes first): Multiple Choice a)$155,000. b)$130,000. c)$159,000. d)$164,000. e)$126,000.
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 TO Actuarial Rating Marketing Sales Actuarial 0 % 40 % 20 % 40 % Rating 25 % 0 % 37.5 % 37.5 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 86,000 Premium Rating $ 60,000 Marketing $ 86,000 Sales $ 96,000 The total cost accumulated in the sales department using the step 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; assume that the actuarial department goes first): Multiple Choice $146,400. $150,400. $177,600. $181,600. $186,600.
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 TO Actuarial Rating Marketing Sales Actuarial 0 % 10 % 20 % 70 % Rating 20 % 0 % 40.0 % 40.0 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 70,000 Premium Rating $ 130,000 Marketing $ 56,000 Sales $ 65,000 The total cost accumulated in the marketing 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): Multiple Choice $131,510. $151,690. $130,714. $171,759. $179,338.
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 TO Actuarial Rating Marketing Sales Actuarial 0 % 10 % 20 % 70 % Rating 10 % 0 % 40.0 % 50.0 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 80,000 Premium Rating $ 70,000 Marketing $ 40,000 Sales $ 86,000 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): Multiple Choice $89,091 $109,271. $186,909. $129,340. $136,919.
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 TO Actuarial Rating Marketing Sales Actuarial 0 % 40 % 20 % 40 % Rating 25 % 0 % 37.5 % 37.5 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Actuarial $ 60,000 Premium Rating $ 40,000 Marketing $ 60,000 Sales $ 70,000 The total cost accumulated in the sales department using the step 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; assume that the actuarial department goes first):
Assume that Painless Dental Clinics, Inc., offers three basic dental services. The following are its prices and costs. Priceper Unit Variable Costper Unit Units Soldper Year Cleaning $ 400 $ 220 8,500 Filling 680 660 1,200 Capping 1,550 920 300 Variable costs include the labor costs of the dental hygienists and dentists. Fixed costs of $540,000 per year include building and equipment costs, marketing costs, and the costs of administration. Painless Dental Clinics is subject to a 20 percent tax rate on income. A cleaning “unit” is a routine teeth cleaning that takes about 45 minutes. A filling “unit” is the work done to fill one or more cavities in one session. A capping “unit” is the work done to put a crown on one tooth. If more than one tooth is crowned in a session, then the clinic counts one unit per tooth (e.g., putting crowns on two teeth counts as two units). d-1.…
Assume that Painless Dental Clinics, Inc., offers three basic dental services. The following are its prices and costs. Priceper Unit Variable Costper Unit Units Soldper Year Cleaning $ 400 $ 220 8,500 Filling 680 660 1,200 Capping 1,550 920 300 Variable costs include the labor costs of the dental hygienists and dentists. Fixed costs of $540,000 per year include building and equipment costs, marketing costs, and the costs of administration. Painless Dental Clinics is subject to a 20 percent tax rate on income. A cleaning “unit” is a routine teeth cleaning that takes about 45 minutes. A filling “unit” is the work done to fill one or more cavities in one session. A capping “unit” is the work done to put a crown on one tooth. If more than one tooth is crowned in a session, then the clinic counts one unit per tooth (e.g., putting crowns on two teeth counts as two units). Required: a. Given this information, how much will Painless Dental Clinics,…