HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production...

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Accounting

HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service departments efforts (in percentages) to the other departments is shown in the following table:
From To
Actuarial Premium Rating Advertising Sales
Actuarial 80%10%10%
Premium 25%1560
The direct operating costs of the departments (including both variable and fixed costs) are:
Actuarial $ 96,000
Premium rating 31,000
Advertising 76,000
Sales 56,000

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