Suppose the engineering department of a firm charges 20% of its total monthly costs to the computer department, and the computer department charges 25% of its total monthly costs to the engineering department. If during a given month the direct costs are $11,750 for the engineering department and $10,000 for the computer department, what are the total costs of each department?
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.