The sales department of an auto dealership charges 10% of its total monthly costs to the service department, and the service department charges 20% of its total monthly costs to the sales department. During a given month, the direct costs are $88,200 for sales and $49,000 for service. Find the total costs of each department.
Within a company there is a (micro) economy that is monitored by the accounting procedures. In terms of the accounts, the various departments "produce" costs, some of which are internal and some of which are direct costs. Problems show how an open Leontief model can be used to determine departmental costs?