The mathematical technique that underlies the reciprocal cost allocation method is:
A)Regression analysis.
B)Simultaneous equations.
C)Analysis of variances.
D)Complex algebraic functions.
E)Multiple correlation.

Question

Quizplus · Accepted Answer

The reciprocal cost allocation method uses simultaneous equations to allocate costs among different departments or cost centers. This involves setting up a system of equations that represent the relationships between the costs incurred by each department and the total costs of the organization. These equations can then be solved to determine the portion of total costs that should be allocated to each department.

The Mathematical Technique That Underlies the Reciprocal Cost Allocation Method