Reference no: EM132547983
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