Using the reciprocal services method, which of the following equations represents the algebraic expressions for the two equations needed to capture the total costs of a Janitorial Department (J) that includes not only $500,000 of direct costs but also 25% of the Maintenance Department (M) cost and the Maintenance Department that includes not only $450,000 of direct costs but also 30% of the Janitorial Department?
A)J = $500,000 + (0.25 ÷ M) and M = $450,000 + (0.30 ÷ J)
B)J = ($500,000 × 0.25) + M and M = ($450,000 × 0.20) + J
C)J = $500,000 - (0.25 × M) and M = $450,000 - (0.20 × J)
D)J = $500,000 + (0.25 × M) and M = $450,000 + (0.20 × J)

Question

Quizplus · Accepted Answer

The correct equations are J = $500,000 + (0.25 × M) and M = $450,000 + (0.30 × J), reflecting the direct costs plus a percentage of the other department's costs. However, the correct percentage for M should be 0.30 as per the question, not 0.20 as stated in option D. This indicates a slight error in the provided options, but D is the closest to the correct formulation based on the given information.

Using the Reciprocal Services Method, Which of the Following Equations