Suppose the shipping department of a firm charges 20% of its total monthly costs to the printing department and that the printing department charges 10% of its total monthly costs to the shipping department. If the direct costs of the shipping department are $16,500 and the direct costs of the printing department are $11,400, find the total costs for 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.