Hugo, Owner of Automated Fabric, Inc

Multiple Choice

Hugo, owner of Automated Fabric, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis:

Which of the following linear equations represents the complete reciprocated cost of the Personnel Department?

A) P = $400,000 - $150,000 (1000 / 13,100) M
B) P = (1000 / 13,100) M
C) P = $150,000 + (1000 / 13,100) M
D) P = $150,000