Bronson, Inc

Multiple Choice

Bronson, Inc. has two support departments, Personnel and Maintenance, whose costs are to be allocated to the operating department's overhead for budgeting and inventory costing purposes. Projected amounts for the next year follow: Services Provided by
Personnel Maintenance
Direct costs $46,750 $22,500
Services provided to:
Personnel -- 10%
Maintenance 20% --
Cutting 40% 30%
Assembly 40% 60%
If the reciprocal method is used, the cost function representing the total cost of personnel will be:

A) $46,750 + (0.2 × maintenance cost)
B) $46,750 + (0.4 × maintenance cost)
C) $46,750 + (0.1 × maintenance cost)
D) $46,750 + (0.1 × maintenance cost) + (0.2 × personnel cost)