Under the reciprocal method what is the algebraic solution to the cost allocation problem?
A)Op = 4,500 + .40 P; P = 2,500 + .30 Op.
B)Op = 4,500 + .70 P; P = 2,500 + .60 Op.
C)Op = 2,500 + .40 P; P = 4,500 + .30 Op.
D)Op = 2,500 + .70 P; P = 4,500 + .60 Op.

Question

Quizplus · Accepted Answer

The correct answer is A because the algebraic solution to the cost allocation problem under the reciprocal method is Op = 4,500 + .40 P; P = 2,500 + .30 Op.

Under the Reciprocal Method What Is the Algebraic Solution to the Cost