Matrix algebra. A firm that manufactures specialized scientific equipment, Nominal 2. Engineering artificial costs, Engineering Inc. (NED, has decided to implement a new costing system to more accurately

$47.32112 allocate its support costs. The company anticipates this will improve the competitiveness of its bids for design contracts and provide solid justification when it claims reimbursement for contracted costs. NEI has four support departments: Engineering (design), Accounting, Information Systems (IS), and Human Resources Administration (HR). NEI’s two operating divisions are geographically separate. One is national and the other international. The table summarizes the five cost pools and the percentage of costs allocated to each department and division. The four support departments are interdependent and each uses the resources of the others. Because the goal of NEI is improved accuracy of cost allocation, the top management team decides to use the reciprocal cost-allocation method for the support department costs. The table summarizes the cost pools and the percentage of each cost pool to be allocated to each department. The cost pools are reported in $millions.LO1

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Constants Consumption of Support: Support Depts. Operating Divisions Supplier of Support Service Cost Pools Engineering Accounting IS HR National International Check Engineering $ 36 0 0.1 0.2 0.05 0.35 0.3 1 Accounting 20 0.1 0 0.1 0.05 0.45 0.3 1 IS 20 0.2 0.1 0 0.05 0.4 0.25 1 HR 10 0.1 0.1. 0.1 0 0.4 0.3 1 Operating Divisions National 30 International 22 $138 REQUIRED 1. Use the matrix algebra function in Excel to calculate the inverse of the coefficient matrix for support departments. 2. Multiply the inverse of the coefficient matrix by the vector of constants to obtain the arti- ficial costs. 3. Calculate the allocation of costs to the support departments and the two divisions.