A company is having three production departments, X, Y and Z, and two service departments, boiler house and pump room. The boiler house depends upon the pump room for supply of water and pump room in its turn is dependent on the boiler house for supply of steam power for driving the pump.

The expenses incurred by the production departments are X—Rs 6,00,000; Y—Rs 5,25,000; and Z—Rs 3,75,000. The expenses for the boiler house are Rs 1,75,500 and the pump room are Rs 2,25,000.

Expenses of the boiler house and the pump room are apportioned to the production departments on the following basis:

Show clearly how the expenses of boiler house and pump room would be apportioned to X, Y and Z departments by following the simultaneous equations method.

Transcribed Image Text:

Departments X Y Z Boller house Pump room Expenses of boiler house 20% 40% 30% - 10% Expenses of pump room 40% 20% 20% 20%