Question

Using the reciprocal services method, which of the following equations represents the algebraic expressions for the two equations needed to capture the total costs of a Janitorial Department (J) that includes not only $350,000 of direct

1 costs but also 30% of the Maintenance Department (M) cost and the Maintenance Department that includes not only $50,000 of direct costs but also 50% of the Janitorial Department?

1. J = $350,000 - (0.30 x M) and M = $50,000 - (0.50 x J)

2. J = $350,000 + (0.30 + M) and M = $50,000 + (0.50 + J)

3. J = ($350,000 x 0.30) + M and M = ($50,000 x 0.50) + J

4. J = $350,000 + (0.30 x M) and M = $50,000 + (0.50 x J)

Answer 1

Given that,

janitorial dept. (J) Includes $350000 of direct costs and also 30% of the maintainance dept. cost (M)

i.e., J = $350000 + ( 30% × M )

And

Maintainance dept. (M) includes $50000 of direct costs and also 50% of the jenitorial dept. (J)

i.e., M = $50000 + ( 50% × J )

Therefore

The algebraic expressions for the two equations needed to capture the total costs are

J = $350000 + (0.30 × M) and M = $50000 + (0.50 × J)

These equations are used to derive the total cost of the respective department by following the reciprocal method.

_____×_____

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