Suppose the development department of a firm charges 10% of its total monthly costs to the promotional department, and the promotional department charges 5% of its total monthly costs to the development department. The direct costs of the development department are $20,400, and the direct costs of the promotional department are $9,900. The solution to the matrix equation

For the column matrix

Gives the total costs for each department. Note that this equation can be written in the form
D + AX = X, or X - AX = D
Which is the form for an open economy. Find the total costs for each department in this (micro) economy?
Within a company there is a (micro) economy that is monitored by the accounting procedures. In terms of the accounts, the various departments "produce" costs, some of which are internal and some of which are direct costs. Problems show how an open Leontief model can be used to determine departmental costs.

Transcribed Image Text:

20,400 9,900 0.05 0.1 Ly