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 options: a) C = $120,000 + (.15 x M) and M = $10,000 + (.40 x C). b) C = $120,000 + (.15 ÷ M) and M = $10,000 + (.40 ÷ C). c) C = $120,000 – (.15 x M) and M = $10,000 – (.40 x C). d) C = ($120,000 x .15) + M and M = ($10,000 x .40) + C.

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 options: a) C = $120,000 + (.15 x M) and M = $10,000 + (.40 x C). b) C = $120,000 + (.15 ÷ M) and M = $10,000 + (.40 ÷ C). c) C = $120,000 – (.15 x M) and M = $10,000 – (.40 x C). d) C = ($120,000 x .15) + M and M = ($10,000 x .40) + C.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4CDQ: How would each of the following costs be classified if units produced is the activity base? a....

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