Rust Company has two support departments (S1 and S2) and two producing departments (X and Y).Department S1 serves Departments S2, X, and Y in the following percentages, respectively: 10%, 35%, 55%.Department S2 serves Departments S1, X, and Y in the following percentages, respectively: 6%, 50%, and 44%.Direct department costs for S1, S2, X, and Y are $15,000, $8,000, $105,000, and $97,500, respectively.
- What is S1's cost equation?

Question

Quizplus · Accepted Answer

S1's cost equation includes its direct costs ($15,000) and the costs allocated from S2 (6% of S2's costs).

Rust Company Has Two Support Departments (S1 and S2) and Two