Hi! I am having some issues on formulating the system of equations to start solving the table. Could you help me please?
Hello Maria!
So, you will want to solve the system in order to find the total amounts from the service cost centres - Power generator and General manufacturing overheads.
Let P represent Power Generator and GMO represent General manufacturing overheads.
P = 179.500€ + GMO × (179.500 / 1.652.000) - because GMO costs are allocated to the remaining manufacturing cost centres proportionately to their directly assigned manufacturing costs.
GMO = 154.000€ + P × (10.000 / 155.000) - because Power generator provides 10 000 Kw to GMO from a total of 155 000 Kw.
Hope this helps!
Pedro Perdigão
So, you will want to solve the system in order to find the total amounts from the service cost centres - Power generator and General manufacturing overheads.
Let P represent Power Generator and GMO represent General manufacturing overheads.
P = 179.500€ + GMO × (179.500 / 1.652.000) - because GMO costs are allocated to the remaining manufacturing cost centres proportionately to their directly assigned manufacturing costs.
GMO = 154.000€ + P × (10.000 / 155.000) - because Power generator provides 10 000 Kw to GMO from a total of 155 000 Kw.
Hope this helps!
Pedro Perdigão