In order to better understand their cost, Happy Time Inc distributes its service department overhead costs to producing departments. Information for May is presented here.

-	Maintenance	Utilities
Overhead costs incurred	$18,700	$9,000
Service provided to:	-	-
Maintenance Dept.	-	10%
Utilities Dept.	20%	-
Producing Dept. A	40%	30%
Producing Dept. B	40%	60%

Assume that Happy Time, Inc. distributes service department overhead costs based on the algebraic (reciprocal) method. What would be the formula to determine the total maintenance costs?

Group of answer choices

1. M = $27,700 + .40A + .40B

2. M = $18,700 + .30U + .40A + .40B

3. M = $9,000 + .20U

4. M = $18,700 + .10U