What question did this study set out to answer?

The aim is to explore matrix algebra methods for allocating costs in accounting, particularly among service and operating departments.

Matrix Algebra and Cost Allocation.

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Mathematical models facilitate cost allocation in operating departments after service departments settle reciprocal costs.

The aim is to explore matrix algebra methods for allocating costs in accounting, particularly among service and operating departments.
Review of existing literature on cost allocation
Development of a matrix model for cost allocation
Analysis of reciprocal dependencies between service departments and operating departments
Proposes an effective matrix model for cost allocation
Identifies the necessity of resolving service department costs before operating department allocations
Demonstrates improvements in accuracy of cost distributions among departments

John Leslie Livingstone (1968) studied this question.

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