The Following Is a System of Simultaneous Linear Equations to Allocate

question 127

Multiple Choice

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.
$$\begin{array} { l c c } \text { Department } & \text { Direct Costs } & \text { Label } \\\text { Subassemblies } & \${ 5 5 0 , 0 0 0 } & \text { P1 } \\\text { Final assembly } & 775,000 & \text { P2 } \\\text { Marketing } & 285,000 & \text { P3 } \\\text { Building occupancy } & 85,000 & \text {S 1 } \\\text { Research \& development } & 120,000 & \text {S2 } \\\text { Supervision } & 45,000 & \text {S 3 }\end{array}$$
Use of services by other departments is as follows.

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The equation for department S3 (supervision) is:

• A) S3 = $45,000 + 0.90S1 + 0.10S2.
• B) S3 = $45,000 + 0.10S1.
• C) S3 = $45,000 + 1.00S1.
• D) S3 = 0.10S1.

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Definitions:

Fredric Jameson

A literary critic and Marxist political theorist known for his analysis of contemporary cultural trends and the concept of postmodernity.

Monopoly Capitalism

An economic system characterized by the concentration of economic power in the hands of a few individuals or corporations, leading to market dominance and limiting competition.

Autonomy

The capacity to make an informed, uncoerced decision; often associated with the ability to govern oneself or an entity's independence.

Frederic Jameson

A literary and cultural critic known for his analysis of contemporary cultural trends and the critique of postmodernity.