Use the Following Information for the Next 4 Questions

question 39

Multiple Choice

Use the following information for the next 4 questions. Bronson, Inc. has two support departments, Personnel and Maintenance, whose costs are to be allocated to the operating department's overhead for budgeting and inventory costing purposes. Projected amounts for the next year follow:
-If the reciprocal method is used, the cost function representing the total cost of Personnel will be

• A) $46,750 + (0.2 × maintenance cost)
• B) $46,750 + (0.4 × maintenance cost)
• C) $46,750 + (0.1 × maintenance cost)
• D) $46,750 + (0.1 × maintenance cost) + (0.2 × personnel cost)

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Definitions:

Expectations Decrease

A reduction in the anticipated or desired outcomes, often leading to adjusted objectives or satisfaction levels.

Rough Order of Magnitude

An early estimate that gives a general sense of a project's size, cost, or duration, often with wide variances.

Ballpark Estimate

A rough approximation or preliminary calculation of cost or value, not intended to be exact but giving a general idea.

Risk Analysis

The systematic study and assessment of potential hazards that could impede achieving project or organizational goals, focusing on prevention and mitigation strategies.