monthly costs vs Direct costs

Suppose the development dept of a firm charges **10%** of its *total* monthly costs to the promotional dept, and the promotional dept charges **5%** of its *total* monthly costs to the development dept.

If the *direct* costs of the development dept. are **$19895** and the *direct* costs of the promotional dept are **$10000**, find the *total* costs for each dept.

Ans. Devel. = **$20,497**, promo. = **$12,049**

I am just beginning to study business math but on this question didn't know how to use the *direct* costs to effect the *total* costs.

.10(19895) + 10000 i thot would be the total costs of the promo dept but its not.

so need help knowing how to set this up (Cool)

Re: monthly costs vs Direct costs

define:

d = *total* total costs of development dept

p = *total * costs of the promotional dept

The total costs for each department are:

the direct costs for *that department *

**plus **some percentage of the *other departments *total costs

So you can write:

d= 19895 + 0.05p

p= 10000 + 0.1d

This is a set of simultaneous equations, solve for d and p. This gives the answers you supplied