The Following Set Up Is a System of Simultaneous Linear

question 14

Multiple Choice

The following set up 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. $$\begin{array} { | l | r | r | } \hline \text { Department } & \text { Drect Costs } & \text { Label } \\\hline \text { Subassemblies } & \$ 550,000 & \mathrm { P } 1 \\\hline \text { Final assembly } & 776,000 & \mathrm { P } 2 \\\hline \text { Marketing } & 285,000 & \mathrm { P } 3 \\\hline \text { Building occupancy } & 85,000 & S1 \\\hline \text { Research\&development } & 120,000 & \mathrm {~S} 2 \\\hline \text { Supervision } & 45,000 & \mathrm { S3 } \\\hline\end{array}$$ Use of services by other departments is as follows. The equation for department S1 (building occupancy) is:

• A) S1 = .10S3.
• B) S1 = $85,000 + 1.00S3.
• C) S1 = $85,000 + .10S3.
• D) S1 = $85,000 + .90S2 + .10S3.

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Laryngotracheobronchitis

An inflammatory condition of the larynx, trachea, and bronchi, commonly called croup, mainly affecting young children and leading to breathing difficulties.

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