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The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Subassemblies Final assembly Direct Costa Label $ 557,000 Pl 782,000 P2 Marketing 292,000 P3 Building occupancy 92,000 $1 Research & development 127,000 82 Supervision 52,000 83 Use of services by other departments is as follows. User Departments Sub- Service Cost Center assemblies Building occupancy 0.20 Final Assembly 0.25 Marketing Building Occupancy RAD Supervision 0.15 0.20 0.20 R&D 0.50 0.50 Supervision 0.30 0.20 0.20 0.10 0.20 The equation for department S1 (building occupancy) is: The equation for department S1 (building occupancy) is: Multiple Choice S1-0.1053 $1-$92,000 0.9052 + 0.1053 $1-$92.000 1.0053. $1-$92.000 0.1053
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