The Following Set Up Is a System of Simultaneous Linear

question 72

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 Reality Company. Use of services by other departments is as follows. The equation for department S3 (supervision) is:

• A)S3 = $45,000 + .90S1 + .10S2.
• B)S3 = $45,000 + .10S1.
• C)S3 = $45,000 + 1.00S1.
• D)S3 = .10S1.

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Definitions:

Supplier Firms

Companies that provide goods or services to other businesses or customers within a supply chain.

Distributor Firms

Distributor firms are companies specialized in distributing products from manufacturers to retailers or directly to consumers.

Mass Production

The manufacture of large quantities of standardized products, often using assembly lines or automated technology.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product efficiently.