Question

The mathematical technique that underlies the reciprocal cost allocation method is:

A. Regression analysis.
B. Simultaneous equations.
C. Analysis of variances.
D. Complex algebraic functions.
E. Multiple correlation.

Answer 1

The mathematical technique that underlies the reciprocal cost allocation method is Simultaneous equations.

Step-by-step explanation:

The mathematical technique that underlies the reciprocal cost allocation method is Simultaneous equations. In the reciprocal cost allocation method, the cost of a service department is allocated to other departments based on the reciprocal of the services received. This allocation method can be represented by a system of simultaneous equations, where each equation represents the allocation of costs from one department to another.