Determine the total maintenance costs

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Sherman Corporation distributes its service department overhead costs directly to producing departments without allocation to the other service departments. Information for March is presented here.

Overhead cost incurred     Maintenance              Utilities

Sercie Provided to                     $18,700             $9,000

Maintenance Dept. 10%

Utilities Dept. 20%

Producing Dept. A                        40%                   30%

Producing Dept. B                      40%                      60%

Question 1: Refer to Sherman Corporation. Assume that Sherman Corporation distributes service department overhead costs based on the algebraic method. What would be the formula to determine the total maintenance costs?

Option a: M = $27,700 + .40A + .40B

Option b: M = $9,000 + .20U

Option c: M = $18,700 + .30U + .40A + .40B

Option d: M = $18,700 + .10U

Reference no: EM132547983

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