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What is the algebraic solution to cost allocation problem

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Reference no: EM132562655

Computer Complex, Inc. has two main services: (1) time on a timeshared computer system, and (2) proprietary computer programs. Computer time is provided by the operation department (Op) and programs are written by the programming department (P)

Question 1: The percentage of each service used by each department for a typical period is:

In a typical period, the operation department (Op) spends $4,500 and the programming department (P) spends $2,500.

Question 2: Under the reciprocal method what is the algebraic solution to the cost allocation problem?

Select one:

a.Op = 4,500 + .70 P; P = 2,500 + .60 Op.

b.Op = 2,500 + .70 P; P = 4,500 + .60 Op.

c.Op = 2,500 + .40 P; P = 4,500 + .30 Op.

d.Op = 4,500 + .40 P; P = 2,500 + .30 Op.

Reference no: EM132562655

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