Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected fo Budgeted manufacturing overhead costs: Plant Maintenance Data Processing Machining Capping PM (Support Dept) DP (Support Dept) M (Operating Dept) C (Operating Dept) $320,000 $60,000 $200,000 $135,000 Services furnished: By Plant Maintenance (budgeted labor-hours): to Data Processing to Machining to Capping By Data Processing (budgeted computer time): to Plant Maintenance to Machining to Capping Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department? O A. DP= $60,000 x (900/6,050) + $320,000x (3,600 / 18,000) B. DP= $320,000 + (900/18,000) DP OC. DP= $60,000+ (3,600/ 18,000) PM 3,600 6,000 8,400 900 4,200 950

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.