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Multiple Choice S1 = $105,000 + 0.20S3. S1 = $105,000 + 0.80S2 + O.20S3. S1 = $105,000 + 1.00S3. S1 = 0.20S3.

Multiple Choice S1 = $105,000 + 0.20S3. S1 = $105,000 + 0.80S2 + O.20S3. S1 = $105,000 + 1.00S3. S1 = 0.20S3.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following 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. Department Direct Costs Label Subassemblies $570,000 P1 Final assembly 795,000 Р2 Marketing Building occupancy 305,000 P3 105,000 S1 Research & development 140,000 S2 Supervision 65,000 S3 Use of services by other departments is as follows. User Departments Sub- Final Building Service Cost Center assemblies Assembly Marketing Оссирancy R&D Supervision Building occupancy 0.30 0.20 0.20 0.15 0.15 R&D 0.50 0.50 --- --- --- Supervision 0.20 0.30 0.20 0.20 0.10 The equation for department S1 (building occupancy) is: Multiple Choice S1 = $105,000 + 0.20S3. S1 = $105,000 + 0.80S2 + 0.20S3. S1 = $105,000 + 1.00S3. S1 = 0.20S3.
Transcribed Image Text:The following 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. Department Direct Costs Label Subassemblies $570,000 P1 Final assembly 795,000 Р2 Marketing Building occupancy 305,000 P3 105,000 S1 Research & development 140,000 S2 Supervision 65,000 S3 Use of services by other departments is as follows. User Departments Sub- Final Building Service Cost Center assemblies Assembly Marketing Оссирancy R&D Supervision Building occupancy 0.30 0.20 0.20 0.15 0.15 R&D 0.50 0.50 --- --- --- Supervision 0.20 0.30 0.20 0.20 0.10 The equation for department S1 (building occupancy) is: Multiple Choice S1 = $105,000 + 0.20S3. S1 = $105,000 + 0.80S2 + 0.20S3. S1 = $105,000 + 1.00S3. S1 = 0.20S3.
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