When using the reciprocal method to allocate support costs, which of the following equations represents the two algebraic expressions needed for the total costs of a Custodial Department (C) that includes not only $120,000 of direct costs but also 15% of the Maintenance Departments (M) cost and the Maintenance Department that consists of $10,000 of direct costs and $40% of the Custodial Department?

Question

Quizplus · Accepted Answer

The reciprocal method involves setting up equations that account for the interdependencies between departments. The Custodial Department's total cost includes its direct costs plus 15% of the Maintenance Department's costs, and the Maintenance Department's total cost includes its direct costs plus 40% of the Custodial Department's costs.

When Using the Reciprocal Method to Allocate Support Costs, Which