The following is a system of simultaneous linear equations to allocate costs using the reciprocal method....

Question

Question

The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is n

Answer 1

Answer #1

Solution:

Equation for department P1 = cost of P1 + 0.30*cost of building occupancy + 0.50*cost of research and development + 0.20*cost of supervision

Hence,

P1 = $552000 + 0.30S1 + 0.50S2 + 0.20S3

Hence second option is correct.

Answer 2

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