Plants Company Has Two Support Departments (S1 and S2) and Two

question 84

Multiple Choice

Plants Company has two support departments (S1 and S2) and two producing departments (P1 and P2) .Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows:
If Plants used the reciprocal method, the algebraic equation expressing the total costs allocated from S1 is

• A) S1 = $7,500 + 0.10S2.
• B) S1 = $10,000 + 0.20S2.
• C) S1 = $7,500 + 0.20S2.
• D) S1 = $10,000 + 0.10S2.

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