The equation for department S2 (research and development)is
A)S2 = $120,000 + .15S1 + .65S2 + .20S3.
B)S2 = .15S1 + 20S3.
C)S2 = $120,000 + .15S1 + .20S3.
D)S2 = $120,000 + .40S1 + .60S3.

Question

Quizplus · Accepted Answer

The equation for department S2 includes a fixed cost of $120,000 and variable costs based on the expenses in departments S1 and S3. This is reflected in option C, which includes the $120,000 fixed cost and coefficients of .15 and .20 for departments S1 and S3, respectively. Options A, B, and D do not include the fixed cost or variable coefficients that match the description given for department S2.

The Equation for Department S2 (Research and Development)is